Paper and packaging group Smurfit Kappa has reported a 58% jump in pre-tax profits for the year to the end of December and it said it expects to deliver good earnings growth in 2016.
Its shares rose sharply in Dublin trade today and closed up over 12%.
Smurfit Kappa's pre-tax profits rose to €599m from €378m while its annual revenues were flat at €8.109 billion.
The company said it was increasing its final dividend by 20% to 48 cent per share.
Combined with the interim dividend of 20 cent per share, this will bring the total dividend to 68 cent, up 23% on the previous year.
During the year, the company invested over €380m in acquisitions to strengthen and diversify its geographic reach and drive earnings.
"Having established a strong platform for growth over the past few years, we expect to deliver good earnings growth in 2016," commented the company's chief executive Tony Smurfit.
"While this will, to some extent, be influenced by the broader macro-economic environment, we are confident our current investment initiatives, our geographic diversity, our integrated business model and our strong free cash flow generation positions us well for 2016 and beyond," Mr Smurfit added.
Smurfit Kappa said its European packaging business performed well during 2015, supported by strong fundamentals and positive containerboard prices.
It said its corrugated pricing increased by 1% in the fourth quarter and it said it expects further progress in the first quarter of this year. Its underlying corrugated volumes rose by 3% with demand steady at a high level.
The group's recycled containerboard operations also delivered a strong performance last year due to positive market dynamics and the impact of capital investment and cost efficiency measures.
Meanwhile, European Old Corrugated Container prices rose "significantly" in the first six months of 2015 and tapered somewhat in the last two months of the year. But the company said this softness in pricing appears to have abated this month and continued good demand is expected to support prices at current levels.
The group's kraftliner operations also saw a strong performance due to strong demand and price increases and Smurfit Kappa said that despite some pressure on prices, it predicts continued good demand for 2016.
Turning to the Americas, Smurfit Kappa said that corrugated volumes rose by 18% due to the positive impact of acquisitions and good market conditions in the larger operations. Underlying volumes rose by 3% for the full year, accelerating to almost 5% in the fourth quarter.
It said that while currency weakness remains an issue in the early part of this year, the group remains focused on implementing price increases across its existing operations and driving synergies in new acquisitions to maximise profits.
However, it added that Venezuela remains a "challenging operating environment" with the level of scarcity there at record high levels. The group's corrugated volume shipments fell by 9% during the year.
It said it remained committed to its operations there and is focused on continuing to drive cost efficiencies through its operations to offset the deteriorating market conditions as much as it can.
Meanwhile, the company said today that it has appointed Ken Bowles, Group Financial Controller, as its Group Chief Financial Officer designate.
Mr Bowles replaces Ian Curley who informed the board of his intention to step down from his position at the end of March.
Smurfit Kappa has about 45,000 workers in about 370 production sites across 34 countries.
