Smurfit Kappa's first quarter earnings soared 22% which the Irish packaging group said on Friday should translate into a "materially better" full year outcome as it fights off interest from U.S. rival International Paper.
Smurfit Kappa frustrated a bid to combine the largest listed U.S. paper packaging firm with Europe's biggest when it rejected a raised takeover offer in March, arguing it was better served pursuing its future as an independent company.
Before its annual shareholder meeting later on Friday, Smurfit said its first quarter core earnings rose to 340 million euros as a result of increased capital investment, higher prices and strong demand that saw revenue improve by 7%.
"Trading in the second quarter remains very encouraging with good demand across most regions, continued corrugated price recovery and lower sequential recovered fibre costs," Tony Smurfit, chief executive said in a statement.
"We have momentum in price recovery in our corrugated business, demand remains robust and paper markets remain tight."
Strong Demand In Europe
Smurfit's earnings slipped this time last year before especially strong demand in Europe helped it finish 2017 slightly ahead of the year before, and it said on Friday that it expected 2018 to be materially better.
Smurfit, which designs and manufactures packaging for the likes of Unilever, Nestle and Procter & Gamble, said in February that it would increase investment by €1.6 billion over the next four years. Some 230 million euros has been invested to date.
Smurfit disclosed a month later that it had rejected an initial approach from International Paper and spurned a second offer three weeks later that valued the Irish group at €8.9 billion at the time.
International Paper said last week that it was disappointed it has not been able to engage with Smurfit since it rejected the raised bid.