DUBLIN: Ireland’s Smurfit Kappa reported that third quarter revenue increased, while the corrugated packaging company remains on track to deliver record earnings before interest, tax, depreciation and amortisation (EBITDA) for the year.
For the quarter ended 30 September, revenue grew 1% to €2.05bn, or 6% on a constant currency basis, compared to the same period last year, with volume growth of 3%. Revenues in Europe decreased by €42m, driven mainly by adverse currency moves, while in the Americas revenues rose by €68m.
EBITDA increased by 6% year-on-year to €323m, or 9% on a constant currency basis, with a margin of 15.7%, which was delivered against a backdrop of higher than expected recovered fibre input costs and adverse currency movements. Basic earnings per share was up 22% to 56.4 cents.
The return on capital employed (ROCE) climbed 16.1%, exceeding its target. The quarter also had a free cash flow of €164m, which resulted in net debt to EBITDA reduced to 2.4 times.Overall corrugated packaging volumes grew 3% and in Europe volumes rose 2%.
In the Americas volumes increased 17% with organic volumes up 2%, excluding Venezuela. There was an improved performance across operations, which was offset by negative currency impacts on EBITDA of about €11m during the quarter.
Chief executive Tony Smurfit said: “SKG continues to meet and exceed its ROCE target and has delivered improved EBITDA margins. This strong result reflects the high quality of our globally diversified operating platform, performance led culture, and the strength of our people and assets.
“Today, the group is well positioned and invested in all its chosen markets. The strength of our cash flow will enable us to continue to invest to support profitable growth while sustaining an attractive dividend stream for our shareholders. We continue to invest to further improve the quality of our asset base, and we will make acquisitions where we identify compelling long term value for our shareholders while continuing to maintain our balance sheet strength.”
