Shares in packaging giant Smurfit Kappa closed 6% higher in Dublin today after it reported higher profits and revenues for 2019 and increased its dividend for the year by 12%.
Smurfit Kappa said its revenues rose by 1% to €9.048 billion from €8.946 billion on the back of the benefits of resilient box pricing, volume growth and the net contribution from acquisitions and disposals.
Pre-tax profits for the year increased to €677m from a loss of €404m in 2018.
The loss in 2018 had come after exceptional items of €1.342 billion which related to the deconsolidation of the group's operations in Venezuela.
Earnings before interest, tax, depreciation and amortisation for the 12 months rose by 7% to €1.65 billion and the company is recommending a final dividend of 80.9 cent per share, a 12% increase on 2018.
During the year, Smurfit Kappa said it continued to strengthen its integrated model, following the acquisition of Reparenco in 2018, and its more recent acquisitions in France, Bulgaria and Serbia.
"These acquisitions significantly enhance our business and further expand our geographic reach. As with previous mergers and acquisitions, the new teams have integrated well and further strengthen the depth and quality of the Group," commented Smurfit Kappa's group chief executive Tony Smurfit.
He said that from a demand perspective, the year has started well and, while macro and economic risks remain, the company expects another year of strong free cash flow and consistent progress against its strategic objectives.
Smurfit Kappa said that EBITDA in its European operations increased by €65m or 5% to €1.332 billion.
It noted that demand growth was ahead of the market and in line with its expectations for the year with particularly good performances in Iberia and Eastern Europe.
During 2020, the company said it will complete a number of major European paper projects and will continue to invest in its market-facing corrugated division to capitalise on the many opportunities and secular trends.
In the Americas, EBITDA increased 13% on 2018 to €360m. The company said that Colombia, Mexico and the US delivered about 84% of the region's earnings with strong year-on-year performances in all three countries.
Smurfit Kappa said it is increasingly well positioned to capitalise on the industry's long-term growth potential.
"Our product is renewable, recyclable and biodegradable and is the most effective transport and merchandising medium for our customers, while improving their environmental footprint," the company said.
"The consistency of our delivery strategically, operationally and financially, through our recent Medium-Term Plan, reflects both the quality of our people and our world-class asset base," it added.
Commenting on today's figures, Richard Flood, investment manager at Brewin Dolphin Ireland, said that Smurfit Kappa's results today are very much as expected.
"Despite some price weakness in linerboard pricing, the company is performing well, helped in part by the structural demand for cardboard boxes as a result of the shift to online shopping," he added.
