Global paper packaging firm Smurfit Kappa Group (SKG) reported an 8% growth in share earnings in its full year results for 2012. But, in a separate announcement, warned of the impact of a Venezuelan currency devaluation.
The Ireland-based integrated paper and board reprocessor said pre-exceptional earnings per share (EPS) rose to €1.083 (£0.93) from €1.001 (£0.86) in 2011.
The company reported a strong EBITDA of €1,020m, up €5m from 2011, and an EBITDA margin of 13.9%. However, allowing for the impacts of currency movement, hyperinflationary adjustments, acquisitions and closures, the underlying move was a decrease of €14m, over 1%.
The firm said hyperinflationary adjustments affecting its Venezuelan operations accounted for a €48m fall in after tax profits and a net monetary loss of €18m.
Other key figures:
- Pre-tax profit €331, up 11% from €299
- Final dividend per share increased by 37% from 15 cent to 20.5 cent
- Two bond transactions completed in 2012 with a combined value of €690 million. A further €400 million bond issued in January 2013 at a rate of 4.125% maturing 2020
In its Q4 performance review SKG said it had introduced a €60 per tonne increase on all recycled containerboard grades from 1 February 2013 in response to unstable OCC prices and continuing unsustainable margins.
It said the company remains a leading operator in the recycling market and maintains a “75% grip on its recovered fibre needs through its own supply and contractual agreements”.
Gary McGann, SKG chief executive (left) said: “Notwithstanding the challenging macro environment, a robust operational performance has allowed SKG to undertake a number of financial and strategic initiatives, which have left the Group in a very good position to drive future growth and deliver increased value to shareholders.
“SKG continues to be the best positioned supplier of innovative, market leading paper-based packaging in its chosen markets of Europe and the Americas. The high quality of its earnings is supported by the Group’s market oriented integrated model, the substantial geographic footprint of its operations and its clear focus on customer service which allows SKG to at least meet, and in many cases define, customer needs.
He added: “In spite of the continuing challenging environment the Group is reporting a solid start to the year, and in line with SKG’s strong financial progress, the Board is recommending a final dividend of 20.5 cent for 2012, a 37% increase on last year. This step reflects the Board’s confidence in the prospects of the Group and the sustainable strength of its business model.”
• In a separate statement the company said as a result of a recent currency devaluation by the Venezuelan Government, it would record a reduction in net assets of approximately €142m and a reduction in the value of the Group’s cash balances by approximately €29m in Q1 2013.