Packaging giant Smurfit Kappa revealed today (Wednesday, 31 October) that its underlying revenue grew over 7% year-on-year in the first nine months of 2018.
The group said that the outcome of its performance reflects corrugated price recovery initiatives, the continued benefit of its capital investment programmes and lower average recovered fibre costs.
These were, however, largely offset by higher energy, labour, logistics and other raw material costs together with a negative currency translation impact.
The group was also greatly set back in September, after the loss of control over its Venezuelan unit. The Group deconsolidated its operations there, resulting in a write-down of net assets of €66 million.
Demand Growth & Price Recovery
“As we start the fourth quarter, we see continued demand growth and further corrugated price recovery. Smurfit Kappa continues to lead the industry, delivering innovative and value-added packaging solutions for our customers,” Group CEO Tony Smurfit said.
“In a world increasingly focused on the environment, demand for sustainable packaging solutions will only add to the existing strong secular drivers of corrugated use.”
In Europe, Smurfit Kappa reported continued year-on-year EBITDA margin expansion with corrugated demand in line with expectations. The Group expects further corrugated price recovery through the latter part of 2018.
During the year it completed the €460 million acquisition of Reparenco, and the group said that its integration is progressing well.
The packaging group also reaffirmed its previous prediction that it’s predicted full-year outcome for 2018 will be ‘materially better’ than 2017.
Tony Smurfit continued, “In May of this year, we stated that we expect 2018 to be materially better than 2017. SKG is on track to deliver a materially better outcome in 2018 with our key performance measures showing significant and continuing improvement.”
The group also revealed that its chair designate, Liam O’Mahony, has announced his intention to step down from his position on the Board in May of next year, after the company’s AGM.
He will be succeeded by Irial Finan, who joined the board in 2012, and has acted as the chair of the remuneration committee since 2015. He was formerly the vice president of the Coca-Cola company.
“It has been a privilege to Chair the Board of Smurfit Kappa Group. The last 10 years have been a transformative time for the business and I have been lucky to work alongside a group of outstanding professionals, both on the Board and throughout the business,” O’Mahony said.
“It is an exciting time for the Group and I am delighted to hand over to Irial Finan, who has a unique breadth and depth of expertise to lead the Smurfit Kappa Board in the period ahead.”
"I am honoured to accept the trust the Board has placed in me and I am committed to building on Liam’s outstanding contribution,” Irial Finan, Chair Designate, added.
“I have been very impressed with the vision and culture of the Group since joining the Board and I look forward to the future development of one of Irelands’ preeminent companies.”
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.