Smurfit shares rise 3% on dividend decision

Despite pre-tax profit being down 16%, the company says its meeting its financial targets for the first six months of the year 

Chief executive of the group, Tony Smurfit, reported a "strong performance" for the year so far. Picture: Brenda Fitzsimons

Shares in Smurfit-Kappa rose 3% as the Irish-based international paper and packaging group said it has restored plans to pay a final dividend by means of an interim payout.           

It comes as the company said it had a "strong performance" in meeting its financial targets in the first six months of the year. 

Nonetheless, pre-tax profit fell 16% to €383m at the half-year stage on revenues of €4.2bn, which were down 9% from a year earlier.             

Smurfit had said in April it was considering not paying a final dividend because of the global fallout from the Covid-19 pandemic.          

"The board has now decided to pay an interim dividend of 80.9 cent per share, the equivalent amount of the withdrawn final dividend," it said. 

"This decision underscores the board’s belief in the inherent strengths of the SKG business, its balance sheet, free cash flow generation and its long-term prospects and our recognition of the importance of dividends to shareholders,” the company said.

The Dublin-listed shares are now little changed in the past year, valuing the group at €6.85bn.    

Chief executive Tony Smurfit said the its business in Europe "performed strongly", while the earnings across its Americas division "improved again".