Packaging giant Smurfit Kappa has reported pre-tax profits of €109m for the three months to the end of March, down 15% from the €128m reported the same time last year.
Smurfit Kappa said its revenues for the first quarter rose by 6% to €2.129 billion from just over €2 billion last year despite what it called a background of significant cost inflation.
The company said its first quarter revenues in Europe rose by €43m (up 4%), while its Americas revenues increased by €85m (15%) year on year.
"These results, against a backdrop of significant recovered fibre cost inflation of approximately €30m year-on-year, reflect the continued strength of our business," the company's chief executive Tony Smurfit said.
"We expect improved margins as paper price increases translate into higher box prices," he added.
"While there are always political and economic risks, and individual markets invariably have challenges from
time to time, we are increasingly well positioned to capitalise on a positive pricing environment in 2017," the CEO added.
Smurfit Kappa said that its Europe operations saw an improved EBITDA result of €213m during the first quarter, up 2% on the same time last year.
The company noted a backdrop of significantly higher recovered fibre costs, which were offset through volume growth, its focus on cost efficiencies and the benefits of its capital investment programme.
In the Americas, EBITDA decreased by 9% year on year to €74m due to higher recovered fibre costs.
The company said that volumes in the Americas for the first quarter grew by 3%, excluding Venezuela where the economic situation continues to deteriorate.
On Venezuela, the company said that the effect of high inflation without a corresponding devaluation of the exchange rate would result in a net monetary loss which may distort some of its key metrics.
"We continue to monitor events as they unfold," the company added.
It said its net assets in Venezuela increased to €148m by the end of March, compared to €91m at the end of December as a result of hyperinflation.
Tony Smurfit said today that the group's pipeline for potential deals is "a little more full than it was" and that it is working on a number of potential transactions.
Most are smaller, bolt-on deals but a couple may be significant, he said.
Meanwhile, Smurfit Kappa today also said that its non-executive directors Thomas Brodin and Gary McGann - a former CEO of the company - retired from the board after today's AGM.
Roberto Newell has been appointed as the group's senior independent director.
Shares in the company moved higher in Dublin trade today.
