Smurfit Kappa revenues rise but profit hit by cost pressures

Irish packaging company Smurfit Kappa posted a rise in third-quarter revenue on Wednesday as it announced acquisitions in Greece and Russia to expand the group's footprint.

In the three months to 30 September, revenue rose 4% to €2.1bn, while revenue in the nine-month period also increased 4%, to €6.4bn. However, pre-tax profit fell 9% in the third quarter to €170m and 17% in the year-to-date to €415m on the back of cost pressures.

Chief executive officer Tony Smurfit said: "In the third quarter, recovered fibre cost pressures remained, resulting in a headwind of almost €40m for the quarter and €111m for the year-to-date compared to 2016. SKG will continue to offset these cost pressures through further corrugated price recovery and ongoing efficiency improvements as we progress towards the year-end and into 2018.

“The demand backdrop remains strong and in these increasingly tight markets, the group continues to invest in our asset base to support our customers through security of supply."

Smurfit said it has bought a corrugated plant in central Moscow, which will establish SKG as the largest international corrugated packaging producer in Russia. In October, it agreed to buy a high-end display and corrugated business in Greece, which it said provides the company with a platform for future expansion in the region.

"SKG remains a disciplined acquirer and is committed to growth through acquisition where it creates long-term value for our shareholders and enhances the overall quality of our business," said Smurfit.