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Cuts prices as raw materials costs ease
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Trading in line with market expectations
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Box volumes still below year-ago levels
Sept 5 (Reuters) - British cardboard maker DS Smith said on Tuesday it was reducing prices for its packages as it benefits from easing raw material costs and customers re-stocking their inventories.
"Cost of raw materials and energy has fallen quite a bit over the last year, so the price of our packaging is actually being reduced," CEO Miles Roberts said in an interview with Reuters, without giving details of the price cuts.
DS Smith, which operates in more than 34 countries and counts the likes of Amazon and Unilever as its customers, said it was seeing signs customers are re-stocking inventories, particularly in Southern and Eastern Europe and the U.S., although box volumes remained below year-ago levels.
Smurfit Kappa, Europe's largest packager, said in August it was seeing a rebound in customer re-stocking, while British peer Mondi, said last month it was seeing signs of easing costs for paper.
"We believe DS Smith box demand has passed the trough, with easing de-stocking supporting the reaffirmed... outlook," analysts at Davy Research said in a note.
The packaging firm said it was trading in line with market expectations for the year.
Analysts on average expect DS Smith to log a pre-tax profit of 706 million pounds ($888.6 million) for the year ending April 30, 2024, according to a company-compiled consensus.
The London-headquartered firm reported a pre-tax profit of 661 million pounds a year ago.
Shares in DS Smith were down about 1% in early trade.
DS Smith, which like other packagers, benefited from an e-commerce boom during the pandemic, said the sector had normalised but it expects consumers to "pick up e-commerce" over the coming years. ($1 = 0.7945 pounds) (Reporting by Prerna Bedi in Bengaluru; Editing by Subhranshu Sahu and Sharon Singleton)
