30th Oct 2024 12:37
(Alliance News) - Smurfit WestRock PLC on Wednesday said it swung to a loss in the third quarter of 2024, due to expenses from its merger with WestRock Co earlier this year.
The Dublin-based packaging manufacturer represents the merger of Ireland-based Surfit Kappa Group PLC and US-based WestRock that took place in June. This third quarter is the first in which the company is reporting combined results.
Smurfit WestRock swung to a net loss of USD150 million in the three months that ended September 30 from net income of USD229 million last year. This was due to the cost of goods tripling to USD6.32 billion from USD2.17 billion, and selling, general & administrative expenses nearly tripling to USD1.03 billion from USD371 million the year before.
Net sales in the third quarter were USD7.67 billion, multiplying up from USD2.92 billion last year. This partly offset the increase in expenses during the quarter, and was primarily driven by USD4.69 billion generated in acquisitions, of which the vast majority, USD4.68 billion, related to the acquisition of WestRock.
Adjusted earnings before interest, tax, depreciation and amortisation also multiplied, to USD1.27 billion from USD525 million the year before.
Chief Executive Officer Tony Smurfit said: "I am pleased to report an excellent performance for the third quarter, the first for Smurfit WestRock. The net loss for the quarter of USD150 million was primarily due to transaction-related expenses and purchase accounting adjustments totalling around USD500 million. With adjusted Ebitda of USD1.27 billion and an adjusted Ebitda margin of 17%, these results are a strong foundation to build upon.
"We believe our focus on plant level autonomy, operational improvement and profitability will deliver, in time, benefits at least equal to the stated synergy target of USD400 million.
"Our third-quarter performance, combined with our deeper knowledge of the combination and continuing asset optimisation, clearly points to the opportunities ahead for Smurfit WestRock. We are at the start of our journey to build the ‘go-to’ sustainable packaging partner of choice, a global leader with an unrivalled scale, geographic reach and product portfolio."
Smurfit WestRock forecast combined adjusted Ebitda of about USD4.7 billion in all of 2024.
Shares in Smurfit WestRock were up 4.2% at 3,589.00 pence each in London on Wednesday afternoon.
By Emily Parsons, Alliance News reporter
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