Smurfit Kappa sales fall 14% in 2009

The Irish corrugated giant this morning posted full-year sales of EUR 6.1bn (£5.3bn), down from EUR 7.1bn in 2008. The group’s EBITDA dropped 21% to EUR 741m.

Smurfit Kappa Group chief executive Gary McGann said: “In the context of a significant collapse in market demand and pricing, this outcome demonstrates the benefits of the Group’s ongoing attention to cost and operating efficiency, and a sustained contribution from its Latin American operations.”

The group’s European packaging operations posted an 8% drop in deliveries in 2009, but said that a dramatic drop in the first half of the year had given way to demand stabilising at a low level in the third quarter.

A pick-up in deliveries in the final two months of 2009 then left deliveries for the fourth quarter just 2% below those a year earlier.

Smurfit Kappa said that after big falls in prices for containerboard and corrugated boxes in the first half of 2009, the combination of an end to de-stocking and increases in input costs were now supporting an upward price trend.

Smurfit Kappa’s other European businesses reported mixed fortunes in the year, with bag-in-box performing strongly but sacks and solidboards declining.

The group said its sacks operations had “significantly underperformed” as a result of lower sack kraft paper prices. The company is currently in talks over offloading its European sack converting operations to Mondi, in a deal in which Mondi would also sell its UK corrugated plants to Smurfit Kappa.

Smurfit Kappa’s Latin American businesses, meanwhile, put in a strong performace, contributing around 17% of overall turnover and around 26% of EBITDA.

SMURFIT KAPPA FULL-YEAR RESULTS 2009
(All figures in EURm)

Turnover 6,057 (2008: 7,062)
EBITDA 741 (2008: 941)
Operating profit 267 (2008: 282)
Net debt 3,052 (2008: 3,185)

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