Corrugated packaging company Smurfit Kappa has reported a drop in second-quarter profit but said its revenue increased, due to strong demand in majority of markets.
The company's pretax profit during the three months ended 30 June 2017, dropped 26% to €136m, compared with €184m a year earlier. Revenue rose to EUR2.10bn from EUR2.05bn.
Smurfit Kappa reported earnings before tax of €136m and it was a 24% increase compared to the first quarter. But, compared to last year, for the same period, the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) was €312m.
Profit after tax for the second quarter was reported to be €136m which was reported to be a 24% increase compared to the first quarter of this year.
The company also released results for the half-year ended. And, these results show that the company’s net profit before tax dropped by 21%, compared to last year’s first half, which stands at €245m, despite an increase in sales by 5%.
Smurfit stated that due to reduced working days and increased recovered fibre costs have had a negative impact on its EBITDA for the second quarter.
Smufit Kappa’s CEO Tony Smurfit said: “In Europe we have seen a strong demand environment in the second quarter leading to a first half increase in absolute corrugated volumes of over 2.5% with growth of 5% for the second quarter on a days adjusted basis. In the Americas, the Group reported strong volume growth in Colombia, Mexico and Brazil while Argentina and Venezuela remained challenging.
“As a result of the containerboard price increases in the first half of the year, we began, in the second quarter, increasing corrugated prices in Europe and the Americas and these increases will be progressively implemented throughout the remainder of the year and into the first quarter of 2018.
“However, shortage of supply and unabated input cost pressures in both regions have necessitated further containerboard price increase announcements for implementation in the third quarter. This will require a further round of corrugated price increases in the fourth quarter and beyond."