DS Smith’s profit drops 54 per cent despite lockdown shopping surge in UK
Cardboard manufacturer, DS Smith, will resume dividend payments despite a 54 per cent drop in profits in the six months to 31 October.
The fall in profits reflected the wider industrial slowdown as demand for boxing fell due to Covid. The FTSE 100 company suspended dividend payments earlier this year.
However, the company, which supplies Amazon, Unilever and Nestlé, saw demand for packaging rise by five per cent in November.
In particular, e-commerce sales rose 30 per cent as online shopping surged.
DS Smith shares were up three per cent on the news.
Miles Roberts, the packaging firm’s CEO, said “We are as excited as ever about structural growth drivers for corrugated packaging with a number of trends accelerated by the Covid-19 pandemic.”
DS Smith announced the construction of two new packaging plants in Poland and Italy to meet the demand.
The company will pay an interim dividend of 4p a share as confidence of recovery increases.
“We saw real momentum in corrugated box volumes and profitability through Q2 and into H2”, Roberts said.