Smurfit Kappa wraps up full-year with €913m profit and dividend hike
Packaging giant Smurfit Kappa (Smurfit) has reported full-year with profits before income tax of €913m, a 22 per cent boost on the previous year.
Its full years results reflected improved performance across the company, despite pandemic-driven logistical challenges and cost inflation.
The group enjoyed an 18 per cent rise in revenues to €10.1bn, while Smurfit’s EBITDA has risen 13 per cent to €1.7bn
Long-term secular trends towards recyclable products have helped the packaging company record corrugated growth of eight per cent.
In particular, its European and Americas businesses performed strongly.
The European business recorded an EBITDA of €1.3bn, while the Americas business reported an EBITDA of €441m.
Following the strong results, the company’s board is recommending a 10 per cent increase in the final dividend to 96.1 cent per share.
In terms of headwinds, soaring energy costs resulted in higher prices for recovered fibre and raw materials, and the company’s net debt grew 22 per cent to €2.9bn amid increased expenditure.
The group has prioritised resilience during recent market shocks, and has committed to multiple acquisitions over the past 12 moths.
This includes the purchase of a recycled container board mill in Italy with a capacity of 600,000 tonnes, and geographic expansion through acquisitions in Mexico and Peru.
It has also approved 82 new converting machines and seven new corrugators in its operations across Europe and the Americas over the past year.
Tony Smurfit, group chief executive said: “As we begin the year, current trading is strong and our integrated paper and packaging system remains effectively sold out. We continue to see significant opportunities across our geographic footprint and as such, we are investing to build a platform for durable growth to meet customer demand.
Commenting on the results, Richard Flood, investment manager at Brewin Dolphin, said: “Smurfit Kappa continues to perform very strongly in a challenging cost environment. Strong demand for its eco-friendly packaging products, which are sustainable and recyclable, means that the company has been able to recover much of its higher energy and raw material costs and expects to continue to do so in the coming year.”