Profits slide at DS Smith amid 'challenging' market conditions

The paper and packaging firm said revenues in the six months to 31 October fell 4% to £3.4bn, while adjusted operating profits slumped 39% to £221m.

Like-for-like box volumes grew by 2%, however.

The blue chip said the figures, which were in line with expectations, had been hit by higher input costs, notably in fibre and paper. Packaging prices were also lower.

Miles Roberts, chief executive, said: "We have delivered a solid performance…despite a continued challenging market environment.

"We have maintained our relentless focus on customer series, product quality and innovation, together with significant cost and productivity initiatives, to mitigate the impact of a softer-than-expected overall market."

Looking forward, DS Smith said the market trends seen in the second quarter had continued into the start of the current half, including paper price weakness.

However, it continues to expect ongoing "modest" volume growth during the second half, with packaging prices improving sequentially through the year to recover higher input costs.

Earlier this year, DS Smith agreed to be taken over by US rival International Paper Company in a £5.8bn deal.

The firm said the deal was on track to complete by the first quarter of 2025.