10th Feb 2021 08:21
(Alliance News) -Â Smurfit Kappa Group PLC's full-year earnings came in ahead of guidance, it said Wednesday, as it ended 2020 on a "particularly strong" note.
Shares in the Irish paper and packaging firm were up 3.3% at 3,658.00 pence in London on Wednesday, making the stock the top performer in the FTSE 100.
Smurfit Kappa's revenue in the year ended December 31 fell 5.8% to EUR8.53 billion from EUR9.05 billion. However, profit rose as finance costs were reduced. Smurfit posted pretax profit of EUR748 million, up 10% from EUR677 million. Finance costs fell 28% to EUR179 million from EUR247 million.
Earnings before interest, tax, depreciation and amortisation fell 8.5% to EUR1.51 billion from EUR1.65 billion. However, this was ahead of November guidance for Ebitda in a range of EUR1.46 billion to EUR1.48 billion for 2020.
The company said it beat earnings expectations due to a "particularly strong finish to the year."
"Both Europe and the Americas had strong demand in the fourth quarter offsetting significantly higher input costs, predominantly in recovered fibre," said Chief Executive Tony Smurfit.
The company recommended an 87.4 cents final payout, to go with the 80.9 cents interim payout and a 27.9 cents dividend it paid in December.
Smurfit had pulled its final dividend for 2019 in the wake of the Covid-19 crisis. Its interim dividend in 2020 was more than double the 27.9 cents from the prior year and equal to the final 2019 dividend it had pulled due to the virus crisis. It then paid the same 27.9 cents as a second interim dividend to catch up.
"SKG recognises the importance of dividends to shareholders and we were pleased to meet all our dividend commitments during 2020. In addition, we have repaid all specific government support schemes related to the pandemic. As noted in our third-quarter trading update, we initiated a programme during the fourth quarter to further increase our operating efficiency and effectiveness through new ways of working. We have taken an exceptional charge of EUR35 million in relation to this and expect to realise the benefits within two years," CEO Smurfit said.
While there remains some uncertainty over Covid-19, the new year has started well, the company said, with the continuation of demand trends seen in the fourth quarter.
By Lucy Heming;Â [email protected]
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