Business

Smurfit-Stone, the US manufacturer of paper-based packaging products, reported a second quarter pre-tax loss of $57m (£28.7m), compared with a loss of $4m in 2007, owing to "unprecedented" higher energy, freight and chemical costs.

Quarterly sales fell 2% to $1.8bn as year-on-year box shipments declined 5%. Excluding the impact of plant closures and efforts to cut low-margin accounts, shipments fell 3%.

Smurfit-Stone chief executive Patrick Moore said the firm was raising its containerboard and box prices by $55 a ton to restore profit margins and improve cashflow in the second half of 2008.

The company has been selling non-core operations and cutting jobs and Moore added that it "remained on track" to complete a restructuring programme and make savings of $525m this year.

Smurfit-Stone has completed or announced the closure of five box plants so far this year and trimmed 150 jobs in the second quarter. Since it began restructuring in 2005 the company has cut 5,725 jobs.

It said higher selling prices and increased mill production, owing to less maintenance downtime, should lead to higher profit in the third quarter, in spite of continued rising costs.