Trade Resources Company News Smurfit Kappa Announced Price Increases for Recycled and Kraftliner Containerboard

Smurfit Kappa Announced Price Increases for Recycled and Kraftliner Containerboard

The results, for the three months and six months ending 30 June 2014, revealed robust capital structure with annualised cash interest reduced to €135m

Additionally, interim dividend increased by 50% to 15.375 cent, which SKG said reflected confidence in future performance.

The global firm also announced price increases for recycled and kraftliner containerboard.

The Group delivered EPS of €0.34, EBITDA result of €295m and continued EBITDA margin expansion in the second quarter.

Gary McGann, SKG chief executive, said: “This has been achieved in spite of weaker than expected European containerboard pricing. The results reflect the resilience of SKG’s earnings profile underpinned by its integrated model together with the benefit of its geographic diversity. The Group’s return on capital employed of 14.3% validates the continued judicious approach to accretive capital investments and the continuous delivery on its cost take-out targets.

The company announced containerboard price increases from 1 August in recycled containerboard and from 1 September in kraftliner, attributed to continued demand growth, stable containerboard supply outlook and high recovered fibre costs.

SKG said these initiatives will provide support to corrugated pricing, providing scope for further corrugated price recovery into 2015.

McGann said performance in the Americas was going well with volume growth expected to improve through the second half of the year.

“The Group’s particular sales approach to international customers in both Europe and the Americas is continuing to make an impact in these markets with customers increasingly seeking a global and environmentally accredited partner for their packaging solutions. The Group is pleased to confirm a 50% increase in the interim dividend to 15.375 cent, reflecting confidence in its future performance,” he said.

McGann added that continued delivery of strong free cash flows in the first half underpins SKG’s capacity to drive its medium term capital allocation initiatives through the cycle.

“With earnings growth expected in 2014, alongside considerable cash interest reductions year-on-year, the Group is increasingly well placed to deploy capital to enhance returns for shareholders.”

Source: http://www.packagingnews.co.uk/news/smurfit-kappa-records-hike-in-profit-margins-and-earnings/
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Smurfit Kappa Records Hike in Profit Margins and Earnings