(Alliance News) - Smurfit Kappa Group PLC on Friday said its earnings grew in the first quarter of 2021, shaking off cost pressures.
Smurfit shares were 2.2% higher at 3,643.00 pence each in London on Friday morning, among the best large-cap performers.
The packaging firm said underlying revenue rose 6% to EUR2.27 billion in the first three months of the year. Earnings before interest, tax, depreciation and amortisation were 1.6% higher year-on-year at EUR386 million from EUR380 million.
The Ebitda margin however, slipped to 17.0% from 17.3%.
"The first quarter was remarkable in many ways. We had strong corrugated volume growth in practically every area and all markets in which we operate. With unprecedented industry wide shortages of supply and input cost pressures, paper prices have moved up sharply. We are recovering these input costs in line with our expectations," Chief Executive Officer Tony Smurfit said.
"Our strong first-quarter performance has set the foundation for accelerated revenue and earnings growth as we move through 2021. This performance and these prospects reflect the strength and quality of Smurfit Kappa."
Corrugated volume growth in Europe and the Americas was 7%, with the company citing its exposure to the e-commerce sector. Online shopping has surged due to Covid-19 lockdowns.
The company added: "Containerboard prices have increased in the first quarter and again at the start of the second quarter as a result of strong demand and higher recovered fibre and other costs. SKG's recovered fibre cost has increased by approximately EUR90 million versus the first quarter of last year. We are progressively recovering these input costs through our corrugated box system."
By Eric Cunha; ericcunha@alliancenews.com
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Smurfit Kappa (SKG)