Smurfit Kappa earnings rise 22%, sees 2018 EBITDA 'materially better'

Paper and packaging group Smurfit Kappa posted a 22% jump in first-quarter earnings on Friday as it said the full-year outcome is expected to be "materially better" than 2017.

In the three months to the end of March, group earnings before interest, taxes, depreciation and amortisation rose to €340m, while group underlying revenue pushed up 7% to €2.17bn.

Smurfit said the results reflect the ongoing benefits of its capital investment programme and strong demand in most markets where it is increasingly working with its customers to help them sell more and reduce their cost of doing business.

Chief executive officer Tony Smurfit said: "Smurfit Kappa Group has again delivered a strong set of results with significant improvement across all key metrics. We have momentum in price recovery in our corrugated business, demand remains robust and paper markets remain tight.

"Paper-based packaging is the sustainable, renewable and recyclable packaging option for our customers and is increasingly used as a key merchandising medium across industries. We have what we consider to be the team, unique performance culture, asset base, innovation capability and financial capacity to capitalise on an increasingly attractive outlook for our business."

Second-quarter trading remains "very encouraging", the conmpany said, with good demand across most regions, continued corrugated price recovery and lower sequential recovered fibre costs.

"We are excited about our prospects in the short, medium and long-term and expect our 2018 EBITDA to be materially better than 2017," Smurfit said.

Back in March, the company rejected a €37.54 a share bid from US rival International Paper, saying it failed to reflect the group's "true intrinsic business worth and future prospects".