(Alliance News) - DS Smith PLC on Tuesday warned its profit for the first six months of its financial year would be lower on a year-on-year basis, but noted a significant improvement in the second quarter compared to the first and said it will pay an interim dividend.
For the first half of the 2019 financial year ended October, DS Smith's pretax profit was GBP213 million.
For the recently completed second quarter to the end of October, the FTSE 100 packaging firm noted that corrugated box volumes have returned to growth compared to the prior year, following the challenges experienced in the first quarter.
Looking ahead, volumes for the six-month period are expected to be 1.5% lower year-on-year.
In addition, DS Smith said that the regional trends noted in September have continued, with corrugated box growth in both Europe and the US, reflecting further gains in market share, particularly with large fast-moving consumer goods and e-commerce customers.
E-commerce in particular has benefited from very high demand from customers ahead of the festive season, DS Smith said.
Looking ahead, due to the improved performance in the second quarter, DS Smith said it remains its intention to declare a dividend for the six-month period.
"I am pleased with the performance of the group in the first half of the year, in what remains a difficult and uncertain economic environment caused by Covid. We continue to be excited by the underlying drivers of demand for our sustainable corrugated packaging and our leading offerings for FMCG and e-commerce customers, together with our focus on cost efficiency and cash generation, give us confidence in the business going forward," said Chief Executive Miles Roberts.
DS Smith will publish its interim results on December 10.
Shares in DS Smith were up 2.5% at 299.20 pence on Tuesday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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