Results round-up

Smurfit Kappa

Following its recent admission to the FTSE 100 index, packaging company Smurfit Kappa hiked its full year dividend 20% as it reported earnings grew despite headwinds from higher raw material costs and adverse currency effects.

For calendar 2016, the Dublin-headquartered company made record earnings before interest, tax depreciation and amortisation of €1.23bn, up 5% from the previous year, and the EBITDA margin increased to 15.1% from 14.6% due to volume growth across markets, resilient box pricing and investment in high return projects.

Revenue nudged up 1% to €8.15bn, with the higher revenue from the Americas partly offsetting the lower revenue in Europe predominantly due to negative currency impacts.

Due to the positive results, Smurfit hiked its final dividend by 20% to 57.6 cents per share.

Basic earnings per share rose 10% year-on-year to 189.4 cents and adjusting for exceptional items, pre-exceptional basic earnings per share fell 4% to 189.4 cents year-on-year.

In Europe, EBITDA rose 3% to €928m, largely due to the the resilience of the price of boxes along with the benefits of the company’s ‘Quick Win’ programme for a high return investment and a 1% increase in corrugated volumes with boxes up over 2%.

For the Americas, EBITDA climbed 11% to €339m, driven by the impact of recent acquisitions along with strong underlying EBITDA growth, up 15% for the year. Volumes grew 20% with growth of 18% in the fourth quarter.

GlaxoSmithKline

GlaxoSmithKline hit its full year earnings target on Wednesday but said growth in 2017 could be severely hampered by the looming prospect of generic competition to its key Advair respiratory drug.

The group said US sales of Advair could decline by as much as 45% to £1bn at constant exchange rates in the event that competition appears in mid-2017, with a "flat to a slight decline" in earnings per share.

On the other hand, guidance for core earnings in 2017 was for a rise of 5-7% at constant rate if no substitutable generic competition in launched in the year.

Currencies could also have a big effect, as if January 2017 average exchange rates are applied to the whole of 2017, it would benefit sterling turnover by around 6% and core EPS by around 9%.

"Clearly, this year we face some uncertainty as to the level of our earnings performance, given the possibility of substitutable generic competition to Advair in the US, and this is reflected in the guidance we have issued today," said chief executive Andrew Witty, who is due to retire next month.

Rio Tinto

Mining giant Rio Tinto swung to a profit in the year to the end of December thanks to a recovery in commodity prices, as it announced a better dividend than expected and a $500m share buyback.

Net earnings came in at $4.6bn compared to a loss of $866m the year before as most commodity prices rose for the first time in a number years in the second half of 2016, despite numerous political and macro shocks to the global economy

Iron ore prices nearly doubled in the year, kicking off 2016 at $43 per dry metric tonne cost and freight and ending the year at around $80 per tonne.

Meanwhile, underlying earnings rose 12% to $5.1bn, beating analysts' expectations of of $4.75bn, while net debt fell to $9.6bn from $13.8bn.

Rio said it will pay a full-year dividend of $1.70 a share, which is down from the previous year’s $2.15 but above analysts’ expectations. In addition, the company said it will buy back shares worth up to $500m this year.