Smurfit Kappa share price rises as decline in box demand continues to slow
Europe’s largest paper packaging producer Smurfit Kappa said the decline in box demand continued to slow in the third quarter as it forecast that full-year core profit would fall by almost 13 per cent to around 2.05 billion euros (£1.78bn).
Earnings before interest, tax, depreciation and amortisation (EBITDA) fell eight per cent in the first nine months of the year, Smurfit said in a trading update on Wednesday, as a rise in its EBITDA margin to 19.0 per cent from 18.2 per cent a year ago failed to offset a fall in volumes.
The London-listed firm’s share price was up by almost three per cent after the open this morning.
However box demand in the third quarter was around two per cent behind 2022 levels versus seven per cent and -five per cent in the first and second quarters, respectively.
The Irish group, which benefited from a boom in demand for packaging goods and e-commerce during COVID-19 lockdowns, said it expected this trend to continue, with Germany in particular showing improved order books.
Smurfit agreed an $11 billion deal in September to buy U.S. rival WestRock and create the world’s biggest paper packaging company.
Reuters – Padraic Halpin