DS SMITH
H1 pre-tax profit dips slightly / Rising material costs weighed on strong volume growth
Packaging maker DS Smith (London / UK; www.dssmith.com) saw its pre-tax profit in the first-half to end-October dipping to GBP 144m (EUR 164m), down 1% on a reported basis and declining 5% on an adjusted basis, as higher input costs offset healthy demand for corrugated boxes. Continuing growth in European online retail amidst an improving EU economy as well as contributions from acquisitions, particularly Interstate Resources, (Arlington, Virginia / USA; www.interstateresources.com) and increased selling prices boosted sales 19% to GBP 2.8 bn. The company pointed to rising fibre costs and paper prices, but noted it continued to recover input costs as planned.
The plastics division's revenues advanced 7% at GBP 179m, excluding currency effects. Adjusted operating profit grew 5% at GBP 20m, partly reflecting volume growth in the core business, but return on sales margins fell 20 basis points to 11.2%.
“Structural shifts, including changes in consumer preferences, the increased relevance of our packaging at point-of-sale and the rise in e-commerce are all underpinning the growth of packaging,” said CEO Miles Roberts. The board is confident about the company's outlook, he added.
Its USD 920m (EUR 781m) deal to buy 80% of Interstate closed in August, while its proposed EUR 208m acquisition of Romanian corrugated packaging firms Ecopack (Ghimbav; www.ecopack.ro) and Ecopaper (Zărnești; www.ecopaper.ro) is expected to be completed in January 2018.
The plastics division's revenues advanced 7% at GBP 179m, excluding currency effects. Adjusted operating profit grew 5% at GBP 20m, partly reflecting volume growth in the core business, but return on sales margins fell 20 basis points to 11.2%.
“Structural shifts, including changes in consumer preferences, the increased relevance of our packaging at point-of-sale and the rise in e-commerce are all underpinning the growth of packaging,” said CEO Miles Roberts. The board is confident about the company's outlook, he added.
Its USD 920m (EUR 781m) deal to buy 80% of Interstate closed in August, while its proposed EUR 208m acquisition of Romanian corrugated packaging firms Ecopack (Ghimbav; www.ecopack.ro) and Ecopaper (Zărnești; www.ecopaper.ro) is expected to be completed in January 2018.
13.12.2017 Plasteurope.com [238579-0]
Published on 13.12.2017