Packaging company Smurfit Kappa posts loss after Venezuelan arm seized by Maduro government

Packaging company Smurfit Kappa posted heavy losses after its Venezuelan business was seized by President Nicolas Maduro’s regime but boosted profits elsewhere.

The company reported pre-tax losses of €404m in 2018 compared with a profit of €576m the previous year – it said the deconsolidation cost €1.3bn but it was seeking compensation for the government’s “unlawful actions.”

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But the FTSE 100 cardboard box maker said earnings rose 25 per cent to €1.55bn for the year and revenue also jumped four per cent to €8.95bn.

The group also revealed plans to hike its shareholder dividend by 12 per cent to 72.2 cents per share, which “reflected the board’s confidence in the strength of and prospects for the business.”

“Our 2018 performance demonstrates the group’s transformation of recent years, which is delivering progressively superior returns,” chief executive Tony Smurfit said.

European revenue rose seven per cent, while revenue in the Americas grew eight per cent.

The company confirmed that the Venezuelan government seized control of its Smurfit Kappa Carton de Venezuela operations last year.

In December it launched international arbitration proceedings, appealing to the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).

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“After almost 65 years in Venezuela, due to continuing actions and interference of the government of Venezuela the group deconsolidated its Venezuelan operations in August 2018,” Smurfit said.

“The group has initiated international arbitration proceedings to protect the interests of its stakeholders and seek compensation from the government of Venezuela for its unlawful actions,” he added.