Smurfit Kappa Sees Profits Fall As Costs Continue To Climb
Paper-packaging group Smurfit Kappa has reported revenue of €8.56 billion in its 2017 full-year results, marking an increase of 5% compared to the previous year.
The group’s operating profit fell by 12%, to €576 million, however, EBITDA saw a slight increase, reaching a record €1.24 billion.
Smurfit Kappa said that its European business showed ‘very strong progression’, delivering a 3% increase in full-year EBITDA, to €955 million. The packaging group attributed this to ongoing input-cost recovery and strong growth in most markets.
The company’s Americas segment reported an 8% decline in EBITDA, to €311 million, due to increased export prices for containerboard, increased costs, adverse currency movements, and adverse natural events.
“Our full-year result was delivered against a backdrop of an increase in excess of €120 million in recovered fibre costs, generally higher raw-material costs ,and adverse currency movements,” said Tony Smurfit, group CEO.
“This improved result for the year, and, more importantly, for the fourth quarter, reflects the benefits of our continued focus on offering our customers cost-effective and innovative solutions, our capital expenditure programme, input-cost recovery through paper and box price increases, and generally strong markets,” Smurfit added.
Smurfit said that the group continues to benefit from its geographic reach, which helps to ensure supplies in tight markets.
Smurfit Kappa says that its most recent acquisitions are integrating well, including a corrugated plant in Russia and a display and corrugated business in Greece.
Looking ahead, the group added that it is committed to expanding its geographic footprint in order to deliver long-term value.
“While we continue to experience currency volatility [and] wage inflation, as well as higher energy and other input costs, 2018 has seen the continuation of good demand in Europe, further input-cost recovery, and signs of improvement in our Americas business,” said Smurfit.
“The group has exciting plans in place to continue our development and sustain our industry leadership into the future,” he said.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.