Packaging group Smurfit Kappa has reported a 69% jump in operating profits - before exceptional items - for the first quarter of 2011.
The company said operating profits rose to €148m from €87m while revenues increased by 18% to €1.8 billion from €1.5 billion. Pre-tax profits were €78m, following a €3m loss a year earlier.
Smurfit Kappa said it saw a good recovery in demand in the three months from January to March, with price recovery in its end markets continuing to be 'satisfactory'.
However, it added that the increase in raw materials, energy and other costs have proven bigger and longer lasting than previously expected. This lead to two additional recycled containerboard price increases so far this year.
Smurfit noted that raw materials costs in the first quarter of 2011 were 10% higher than the last quarter of 2010, while energy costs were 5% more expensive.
It added that demand remains good so far in the second quarter of the year.
The company said it had reduced its net debt by €49m to €3.06 billion due to the relative strength of the euro against the dollar and proceeds from the sale of an associate shareholding.
