Smurfit Kappa reports earnings of €487m in first three months of 2024

Smurfit Kappa is led by CEO Tony Smurfit. Photo: Simon Dawson/Bloomberg

Caoimhe Gordon

Smurfit Kappa saw revenues and profits decline in the first three months of the year but pointed to an improvement in demand for boxes.

The paper packaging giant reported earnings before interest, taxation, depreciation and amortisation (Ebitda) of €487m in the first quarter, down from €579m reported by the company last year.

In a trading update, the group also reported an Ebitda margin of 18pc for the period.

Smurfit Kappa generated revenues of €2.7bn in the three months to the end of March. This was down from the €2.995bn reported in the corresponding period in 2023.

Corrugated box volumes rose in the period. Volumes were up 3pc in Europe and increased 2pc in the Americas region, Smurfit Kappa reported.

In September, Smurfit Kappa and US paper and packaging rival WestRock announced plans to merge. The transaction is expected to close in the second quarter of 2024 subject to shareholder and regulatory approvals.

“Our integration planning with WestRock is progressing well and as expected. We remain on-track to complete the transaction in early July,” group chief executive Tony Smurfit said.

“Due to our investment program in recent years and set against an improving industry backdrop with long-term positive structural trends, our combination with WestRock creates a global leader in innovative and sustainable packaging with a very exciting future for all stakeholders," he added.

Smurfit Kappa reported earnings of €2.08bn last year, down 12pc from 2022. Total revenue fell by 12pc to €11.3bn in 2023, according to annual results published by the company earlier this year.

Smurfit Kappa has around 47,000 employees in over 350 production sites across 36 countries.

The company is located in 22 countries in Europe, as well as in 13 across the Americas.

Goodbody analyst Kate McCarthy said the trading update was positive as the volume demand, particularly in Europe, improves.

In a note, she added that “recent price movements in containerboard [are] set to underpin a box price recovery” in the second half of 2024.

Davy analyst Justin Jordan added that the merger with WestRock remains on track for the summer.

He wrote in a note to investors that Goodbody expects Smurfit WestRock to be included in the S&P 500 index in the second half of the year.