Smurfit Kappa to close European plants amid flat Q3 earnings
Paper and packaging group Smurfit Kappa revealed plans to close or shrink four corrugated cardboard plants and a recycled container-board mill in Europe as it posted broadly flat third quarter earnings.
Smurfit Kappa Group
€41.52
18:30 22/01/21
Smurfit Kappa Group (CDI)
3,436.00p
15:30 26/04/24
Smurfit said it has started talks with unions and works councils about shutting or downsizing the plants in France, Sweden and northern Germany.
It will take a €50m charge for the cuts, of which €15m was incurred in the third quarter, with the balance expected in the fourth quarter.
It said 2014 cost cuts were progressing well and should be slightly ahead of its stated annual target of €100m.
Third quarter pre-tax earnings before interest, depreciation and amortisation (EBITDA) came in at €302m against €303m a year ago, although EBITDA in the year to date rose 6% to €866m against last time.
Third quarter and year-to-date revenue was flat at just over €2bn and €5.9bn, respectively.
Chief executive Gary McGann said: "“In spite of a somewhat weaker macroeconomic backdrop in the third quarter, the group continued to see demand growth in Europe through the period, and delivered a strong performance in the region supported by pricing actions and continuing cost take-out initiatives.
"The implementation of both recycled and virgin container-board price increases during the quarter is underpinning corrugated pricing."
Shares rose €0.29 or 1.8% to €16.65 at 12:23 in London.