Paper and packaging giant Smurfit Kappa will take a €142m hit to the value of its assets in Venezuela.

This follows the devaluation of the Bolivar Fuerte announced by the Venezuelan government last week.

In a statement to the stock exchange Smurfit Kappa said that apart from the reduction in asset value, its cash balances will also be reduced by €29m in the first financial quarter of the year.

But it will not have a material impact on profits, it added.

In its annual results last week, Smurfit Kappa said that its operations in Venezuela had a challenging year, particularly affected by a number of ‘work to rule’ difficulties.

It said that volumes decreased by 17% year-on-year, and EBITDA performance was adversely affected by about 35%.

It said that overall, the difficult business environment in Venezuela that has generally prevailed over the last number of years continues to persist.