5th Feb 2020 08:59
(Alliance News) - Packaging firm Smurfit Kappa Group PLC on Wednesday upped its final payout and swung to an annual profit in 2019 after one-off costs in 2018 related to the seizure of its Venezuelan business didn't repeat.
In the year to December 31, revenue was 1.1% higher at EUR9.05 billion from EUR8.95 billion.
The FTSE 100 company reported pretax profit of EUR677 million, swinging from 2018's EUR404 million loss.
Last year, the Dublin-based company reported EUR1.34 billion in exceptional items relating to 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. Being unable to control the business, Smurfit deconsolidated its operations in the country.
"As previously communicated, the group has initiated international arbitration proceedings to protect the interests of its stakeholders and seek compensation from the government of Venezuela. This continues to progress," Smurfit said on Wednesday.
Exceptional items in 2019 included a EUR124 million fine from the Italian Competition Authority.
In early 2017, the Italian regulator started an antitrust investigation for alleged market manipulation and price fixing in the corrugated packaging market in 2015 and 2016.
Around 50 companies were under investigation, including Smurfit Kappa's subsidiary, and peer DS Smith's subsidiary DS Smith Packaging Italia SpA.
"We are very disappointed with the decision of the ICA on many levels and will vigorously appeal this decision on both administrative and substantive grounds. This process may take a number of years. SKG is committed to the highest standards of conduct in its business and does not tolerate any actions that are inconsistent with its values," Smurfit added on Wednesday.
Smurfit raised its final dividend by 12% to 80.90 cents a share, taking its full-year payout to 108.80 cents, up 21% from 89.90 cents.
Chief Executive Tony Smurfit said: "2019 represents another period of strong delivery and performance for Smurfit. Earnings before interest, taxes, depreciation, and amortisation was EUR1.65 billion, a 7% increase on 2018 with an increased EBITDA margin of 18.2%.
"Our vision is to be a globally admired company, dynamically delivering secure and superior returns for all stakeholders. Our recent performance shows progress towards the realisation of our vision."
The CEO added: "From a demand perspective, the year has started well and, while macro and economic risks remain, we expect another year of strong free cash flow and consistent progress against our strategic objectives."
Shares in the company were 5.9% higher at 2,8786.00 pence each in London on Wednesday morning.
By Eric Cunha; [email protected]
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