DS Smith sees H1 in line as price rises offset higher costs

Packaging company DS Smith said its first half was in line with expectations as price rises offset rising input costs.

The company on Thursday said corrugated box volume growth had “very good” in the six months to October 31, with the fast-moving consumer goods sector, which accounts for more than 80% of volume, particularly strong.

Smith said the sector had made continuing gains with large multinational customers.

“Our strength in sustainability and our ability to help customers as they position themselves for a more circular economy, including replacing single-use plastic packaging and introducing low carbon products, continues to gain increasing customer traction,” said chief executive Miles Roberts.

E-commerce had continued to grow despite the physical stores reopening as Covid-19 pandemic lockdowns were eased.

Input cost increases combined with high demand had led to significant paper price rises, the company said.

Smith said input costs including energy and logistics had seen “significant increases” throughout the half.

“In relation to energy, our long-term hedging arrangements have given us significant protection from the recent price rises. More generally, strong long-term supplier relationships have allowed us to maintain good levels of service to our customers,” Roberts said.

He added that areas such as logistics had been supported by its own in-house fleet of vehicles as UK driver shortages hit supply chains.