Smurfit Kappa fourth quarter growth driven by European demand

Smurfit Kappa’s fourth-quarter earnings rose 10% as strong demand in Europe for the paper packaging company’s products offset weak performance in the Americas.

Earnings before interest, tax and other items rose to €351m (£312m) in the three months to the end of December from €320m a year before. Revenue rose 7% to €2.2bn and pre-tax profit increased 4% to €161m.

The FTSE 100 company’s fourth-quarter performance was an improvement on the rest of 2017. Annual earnings were flat at €1.24bn and pre-tax profit for the year fell 12% to €576m as the business was affected by currency swings and rising costs.

Earnings in Europe rose €41m in the fourth quarter as demand for products increased amid strong economic growth and business confidence in the region. In the Americas earnings fell €11m as demand slowed in some countries and performance was affected by rising costs and bad weather events.

Dublin-based Smurfit Kappa is one of the world’s biggest producers of corrugated and paper-based packaging. It operates in Europe and the Americas and has about 46,000 employees.

Tony Smurfit, the company’s chief executive, said: “Our European business showed very strong progression for the quarter. This strong performance came as a result of high levels of demand across most product lines and input cost recovery.” He said the result for the Americas “came in below our expectations”.

Smurfit said he expected further currency swings, wage increases and higher input costs but that demand remained strong in Europe, the company was recovering cost increases through price rises and there were signs of recovery in the Americas.