Paper and packaging group Smurfit Kappa has reported an 18% decrease in revenues for the first three months of 2009. After what it called a difficult operating environment, it said revenues fell to €1.5 billion from a figure of over €1.8 billion the same time last year.
Smurfit Kappa's operating profits before exceptional items were down 47% to €82m from €156m the same time last year. Pre-tax profits fell from €61.5m to €20m.
The group said its first quarter performance reflected another strong showing from its Latin American operations and its progressively lower cost base. A further reduction in costs, especially for energy and wood, are also expected to benefit the company in the coming months.
Smurfit Kappa said that in light of the challenging economic outlook, it will not be paying out dividends in 2009. It also said that the ongoing uncertainty in the global economy makes its difficult to provide guidance in any meaningful manner.
'In a difficult operating environment, we are pleased to report resilient EBITDA margins and continued strong cash flow management,' CEO Gary McGann said.
Smurfit said revenue fell as a result of the impact of the weak macro environment on both volumes and price but saw signs of increasing capacity rationalisation.
Smurfit Kappa, whose products include industrial boxes and trays for perishable products such as fruits and flowers, said its focus remained on maximising cashflow generation and net debt reduction.
Smurfit Kappa, which listed on the stock market in March 2007, has operations in over 31 countries.
Shares in the group were up 22 cent at €2.88 in Dublin by afternoon.
