Packaging firm Smurfit Kappa has posted a 9% decrease in revenue in the first half of its financial year, with EBITDA at the business falling by 13%.
Commenting on the performance of the business, chief executive Tony Smurfit cited the "extremely challenging operating environment", adding that he was "extremely proud" of the group's employees.
EBITDA margin for the half-year period was 17.5%, down from 18.3% in the same period last year, while the group reported free cash flow of €238 million in the period, up 50% on H1 2019.
'Strength And Scale'
"The strength and scale of our integrated system and our supply chain expertise meant we were able to ensure the continuity of supply of essential products for everyday life across multiple sectors," Smurfit said.
"We are again proving that our business model, geographic diversity and our commitment to innovation and sustainability continue to deliver."
The group said that its European business 'performed strongly' in the six-month period, with an EBITDA margin of 17.6% and flat corrugated box volumes, while the EBITDA margin in the US increased to 19.0% (up from 17.1%).
The period also saw the group complete its largest ever infrastructure investment (€134 million), in a recovery boiler in Austria, which will reduce its CO2 emissions by 40,000 tonnes per annum.
The group said that it 'acted prudently' by withdrawing its recommendation to pay a dividend of 80.9 cent per share, due to the uncertainty surrounding the COVID-19 pandemic, but that it has now decided to pay said dividend, underscoring its belief in the 'inherent strengths of the SKG business, its balance sheet, free cash flow generation and its long-term prospects'.
“SKG has again demonstrated its strength and the consistency of its delivery through these results," Smurfit said. "This performance reflects: targeted capital investment; effective acquisitions; a continued focus on innovation and sustainability; and, above all else, the quality of our people.
"SKG will remain agile and resilient, continuing to deliver, and while known macro and economic risks remain, we are confident in our future prospects."
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.