In the quarter under review, the group reported an improved year-on-year EBITDA margin of 13.9% and an increasingly strong Return on Capital Employed of 13.8% further underlining SKG’s progress on achieving optimal returns through continued operating efficiency and judicious capital investment
European corrugated packaging demand remains reasonable with quarter-on-quarter growth in Western Europe partially offset by lower volumes in Eastern Europe.
The first quarter was also impacted by weakening recovered paper costs and an inventory build-up from the year-end, resulting in recycled containerboard price decreases which slowed down corrugated price recovery.
SKG is taking approximately 25,000 tonnes of recycled containerboard downtime in the second quarter. Despite the current circumstances SKG's integrated model has underpinned relatively good earnings development in the quarter.
Gary McGann, Smurfit Kappa Group CEO, commented: "In terms of the first quarter, EBITDA growth of 12% and the sharply increased EPS year-on-year reflects a strong underlying performance in our Americas business, price improvements in our European packaging operations, and materially reduced financing costs as a result of the completion of the significantly more attractive financing structure for the Group, most of which has been completed in 2013."
