Smurfit Kappa profit slips 1% in second quarter

Paper packaging manufacturer Smurfit Kappa saw its profit slip 1 per cent in the second quarter of 2007, but remained static for the first six months of 2008.

Earnings before exceptional items and share-based payments fell from €260 million to €257 million in the three-month period ending June 30th. The company blamed the negative impact of currency for the drop, saying that on a comparable basis, earnings actually rose €1 million year on year.

Operating profit fell 2 per cent to €156 million during the same period.

However, revenue for the quarter rose 1 per cent to €1.85 billion from €1.83 billion a year earlier.

In the first six months of the year, revenue also climbed 1 per cent, to €3.67 billion, while earnings before exceptional items remained at €514 million for the period. Operating profit rose 4 per cent to €312 million.

The company also reduced its net debt by 9 per cent to €3.2 billion. 

The firm warned that trading conditions would continue to be difficult for the rest of the year.

"As anticipated early this year, the group expects conditions to remain challenging for the remainder of 2008, characterised by a slow down in corrugated demand growth and broad-based cost inflation," said Gary McGann, chief executive of Smurfit Kappa.

However, Mr McGann said he was confident that Smurfit Kappa would meet market expectations for the year.