Smurfit Kappa sees margin pressure
Paper-based packaging products manufacturer Smurfit Kappa warned that a number of factors will have an impact on margin throughout 2008.
The group said the factors include a slowdown in demand growth for corrugated, continued weakness of dollar and further cost inflation.
Pre-tax profit before exceptionals for the first quarter rose to €90m from €43m due to higher operating profit and a decrease in its net interest cost. Turnover rose 2% to €1.8bn.
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It said its financial outcome in the first quarter of 2008 reflects good performance within the corrugated business, which was partly offset by weakening conditions within its paper system.
Business conditions in Europe reflected continued corrugated price recovery and broad-based cost inflation. It said the Latin American business continues to make a significant contribution to its overall performance.
"The group is pleased to report a positive EBITDA outcome and a strong cash flow performance for the three month period to 31 March, 2008. We are also pleased to report continued progress against our leverage objectives," said CEO Gary McGann.
