27th Jul 2022 15:14
(Alliance News) - Smurfit Kappa Group PLC's margin resilience impressed analysts on Wednesday, as the packaging firm shakes off tough market conditions.
The Irish corrugated packaging firm reported a "strong" half-year performance as profit increased markedly.
For the six months ended June 30, the Dublin-based company's pretax profit jumped 86% to EUR769 million from EUR413 million a year ago. Revenue surged 36% to EUR6.39 billion from EUR4.68 billion.
Smurfit reported an earnings before interest, tax, depreciation and amortisation margin on 19.6% for the second quarter alone, Davy noted, beating the broker's forecast of 17.3%.
The margin figure was an all-time high for Smurfit, Davy said.
"With the market firmly focused on 'the cycle', energy availability and risks to 2023 numbers, today's print is another proof point of the underlying transformation of Smurfit Kappa Group's business model," Davy said.
Davy lifted its full-year Ebitda prediction to EUR2.20 billion from EUR2.05 billion. Smurfit's Ebitda in 2021 rose 13% to EUR1.70 billion.
In the first half of 2022, the firm's Ebitda climbed 50% to EUR1.17 billion from EUR781 million.
Smurfit Kappa declared an interim dividend of 31.6 cents per share, up 7.8% on the 29.3 cents paid out a year before, reflecting "the confidence in the quality of our business and its future prospects".
Brewin Dolphin analyst Richard Flood commented: "Smurfit Kappa has produced an excellent set of results. In a period with so many challenges, most notably the rising cost of doing business, Smurfit has managed to substantially increase its margins and beat profit expectations. Furthermore, despite worries about a slowing economy, demand for the company’s packaging products remains very strong."
By Eric Cunha; [email protected]
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