1st May 2025 13:22
(Alliance News) - Smurfit WestRock PLC set out a confident outlook on Thursday, and said there is still a "substantial opportunity to continue to structurally improve the business".
The recently-formed packaging firm reported net income of USD382 million for the first-quarter of 2025, up markedly from the USD191 million achieved by Smurfit Kappa alone a year prior. Net sales totalled USD7.66 billion, a sharp rise from Smurfit Kappa's USD2.93 billion in the first-quarter of 2024.
Smurfit WestRock represents the merger of Ireland's Smurfit Kappa Group and the US's WestRock Co. The deal was completed in June of last year.
"I am pleased to report a strong first quarter performance," Chief Executive Officer Tony Smurfit commented.
"I am especially pleased with how well the combination has come together, with strong operational and cultural integration taking place across all three regions. Coupled with our geographic footprint and our unrivalled portfolio of innovative and sustainable packaging solutions, we have a customer-focused and performance-driven team that is delivering for all stakeholders.
The CEO continued:" Our synergy programme is on track to deliver USD400 million, with approximately USD350 million in the current year. We believe there is substantial opportunity to continue to structurally improve the business through a sharper commercial and operational focus, at least equal to our synergy target."
Smurfit WestRock announced major capacity reductions and facility closures in the US and Germany, impacting around 650 jobs globally as it adjusts operations in response to shifting demand and cost pressures.
Smurfit WestRock said it will permanently close its coated recycled board mill in St Paul, Minnesota, and discontinue production at its containerboard mill in Forney, Texas, though the specialty coating facility at Forney will remain open. These moves are expected to reduce the company's containerboard and coated recycled board capacity by more than 500,000 tonnes.
In Germany, Smurfit WestRock has begun consultations with local works councils regarding the potential permanent closure of two converting facilities.
The CEO added: "Consistent with our disciplined operating approach and before we see the impact in our system of the announced closures, we expect to incur additional economic downtime in the second quarter costing approximately USD100 million versus the first quarter."
Smurfit WestRock expects second-quarter adjusted earnings before interest, tax, depreciation and amortisation of around USD1.2 billion. In the first-quarter, it totalled USD1.25 billion.
For the full-year, it predicts an adjusted Ebitda between USD5.0 billion and USD5.2 billion.
"Our progressive improvement together with a strong margin performance is a clear demonstration of the strength of Smurfit Westrock in a period characterised by significant volatility. As the global leader, with leading market positions across many of the 40 countries in which we operate, we continue to see significant opportunity for growth, development and cost take‑out. We believe that the actions we have taken, and continue to take, will translate to superior operating and financial performance for Smurfit Westrock," CEO Smurfit said.
Shares in the company fell 2.1% to 3,067.33 pence each in London on Thursday afternoon.
By Eric Cunha, Alliance News news editor
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