Smurfit Kappa Withdraws Dividend Due To COVID-19 Outbreak
In light of the increased macro uncertainty due to the COVID-19 pandemic, Smurfit kappa has said in its latest trading update that it has withdrawn its previously proposed final dividend of 80.9 cent per share for 2020.
The paper and packaging group said that its performance in the first quarter was strong and its balance sheet, liquidity position and cash flow generation continue to give the Board confidence in the prospects for its business and its strategic direction.
The group delivered revenue of €2,194 million for the three months to 31 March 2020.
Its reported earnings before interest, tax, depreciation and amortisation (EBITDA) was €380 million during the last quarter.
During the quarter, all of its facilities were operational, the company said.
"The scale and geographic reach of our operations has also ensured that our extensive and diverse customer base has been able to deliver its essential and critical supplies," Tony Smurfit, Group CEO, commented.
Having learned from its colleagues in it Italian operations, the company said that it has introduced several Group-wide measures to protect its employees and that it has supported this with frequent communications to help them respond safely to the challenges posed by COVID-19.
"We are an integral part of today’s vital supply-chains, whether it is ensuring that retailers remain supplied with food and other basic goods or ensuring that critical pharmaceutical and medical supplies and devices reach hospitals and other health care facilities where they are needed to fight this pandemic," Smurfit added.
At the end of the first quarter of 2020, the company outlined that it had liquidity of over €1.5 billion, average debt maturities of over five years, no bond maturity until 2024, all of which is supported by the group’s strong operational free cash-flow.
The company said that it has reduced its previous working capital guidance of €615 million to an estimated €500-550 million for the year.
The capital expenditure in 2019 was €730 million, it noted.
The company's next AGM is due to take place on 30 April 2020.
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