Smurfit warns of ‘unprecedented’ shortages

Smurfit Kappa CEO Tony Smurfit says the company is recovering cost rises

Ellie Donnelly Twitter Email

May 01 2021 02:30 AM

Paper packaging giant Smurfit Kappa saw its revenue increase in the first three months of this year. However, it warned that supply shortages across the industry were pushing prices up.

The group, headed by Tony Smurfit, reported revenue of €2.27bn in the three months to March 31, an increase of 6pc on the prior year.

The company, which has 46,000 employees across 35 countries, experienced volume growth “in practically every area and all markets” that it operates in, according to a trading update.

Earnings for the period were €386m, a slight increase on the corresponding period in 2020.

The group’s earnings margin stood at 17pc in quarter one.

“We had strong corrugated volume growth in practically every area and all markets in which we operate,” Mr Smurfit said.

There are currently “unprecedented” industry-wide supply shortages, as well as input cost pressures, which have pushed paper prices up sharply, according to Mr Smurfit.

The company is managing to recover these input costs “in line with our expectations”, he added.

In both Europe and the Americas Smurfit Kappa saw sales of corrugated paper increase 7pc in volume terms during the first three months of this year.

It is accelerating its capital investment plans, “with many high return projects that will enhance shareholder returns”.

“These include the construction of mega plants and the acquisition of many converting machines in order to meet our customers’ demand growth and continue our cost optimisation programmes,” the company said.