13th Feb 2019 08:21
LONDON (Alliance News) - Smurfit Kappa Group PLC on Wednesday said it swung to a loss in its most recent year after the Venezuelan government seized its business there, amid political chaos.
The Irish paper and packaging firm's 2018 pretax loss was EUR404 million, swinging from a EUR576 million profit the year before.
This was a result of the deconsolidation of Smurfit's business and operations in Venezuela. The government took control of Smurfit Kappa Carton de Venezuela in the third quarter of 2018, and made two arrests.
Being unable to control the business, Smurfit deconsolidated its operations in the country. In December, the company submitted a request for arbitration and is seeking compensation for the seizure of its business "as well as for other arbitrary, inconsistent and disproportionate State measures that have destroyed the value of [its] investments in Venezuela".
Venezuela President Nicolas Maduro has faced international demands to give way to Juan Guaido, who is head of the South American country's national assembly, amid mass protests. More than two million people have fled the country's soaring hyperinflation and severe food and medical shortages over the last two years.
On a pre-exceptional basis, Smurfit Kappa's pretax profit was EUR938 million, up 56% from EUR601 million last year. Revenue was EUR8.95 billion, up 4.6% from EUR8.56 billion in 2017.
Earnings before interest, taxes, depreciation and amortisation totalled EUR1.58 billion, versus EUR1.27 billion the year before. Consensus was for EUR1.53 billion.
The company declared a final dividend of 72.2 EUR cents per share, bringing the total for 2018 up 11% to 97.6 cents from from 87.6 cents in 2017.
"Our 2018 performance demonstrates the group's transformation of recent years, which is delivering progressively superior returns. This creates the platform for success in 2019 and beyond. The group delivered on or exceeded its key measures. This reflects our market-leading positions, our innovation capability and investment decisions. Above all else, it reflects an unrelenting focus on delivering value to our customer base, a performance-led culture and the quality of our people," said Chief Executive Tony Smurfit.
FTSE 100-listed shares in Smurfit were up 2.0% at 2,311.00 pence in London early Wednesday.
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