1st May 2015 07:09
LONDON (Alliance News) - Irish paper packaging company Smurfit Kappa Group PLC on Friday said it has named a new chief executive designate as it posted a fall in profit in the first quarter due to currency headwinds and an accounting change.
Smurfit said it has appointed Tony Smurfit, currently president and chief operating officer of the company, as its chief executive designate. He will take over from current chief Gary McCann on August 31, when McCann will retire from the role.
The move comes as the group said its earnings before interest, taxation, depreciation and amortisation in the first quarter to the end of March fell 1% to EUR266 million from EUR269 million. The EBITDA was pulled lower by the decision by Smurfit to consolidate the results of its operations in Venezuela at the variable Sistema Marginal de Divisas rate, which dragged EBITDA down by EUR14 million in the quarter.
EBITDA margins in the business have also been hit in the quarter by significant weakening in some currencies in Latin America, without any price increases to compensate, some operational issues and temporary pricing pressure in Europe.
Organic corrugated packaging volume grew more than 3% in the quarter, boosted by a 4% growth in volume in its European business, particularly in southern Europe.
"Against the backdrop of a more positive European business environment, and improvements in our operational performance in the Americas, we expect to deliver earnings growth year-on-year. As we build the business through our differentiated offering and new investments, we remain committed to our core financial and operational disciplines," said outgoing CEO McCann.
"Our focus continues to be one of driving strong returns through superior operating performance, a progressive dividend stream, targeted high-return internal investments and accretive acquisitions."
Shares in Smurfit opened down 2.3% to EUR26.73 on Friday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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