Smurfit Kappa's Q2 profit tanks on softer demand, higher input costs

Smurfit WestRock

30/07/2024 22:58

July 30 (Reuters) - Smurfit Westrock  SWR.L   SW.N 
reported a 51% drop in Smurfit Kappa's quarterly profit on
Tuesday, hurt by softer consumer spending on goods crimping
demand for packaging products as well as higher input costs.
    While packaging companies are starting to see a return in
demand after dealing with a year-long slowdown, sales still
remain weak as overall consumer spending on goods has dwindled. 
    In September 2023, packaging groups Smurfit Kappa and
WestRock entered into a deal to create Smurfit WestRock, one of
the world's largest paper and packaging producers worth nearly
$20 billion. 
    The deal was completed on July 5, hence the combined
company's results will be reported from the third quarter of
2024.
    Smurfit Kappa's second-quarter profit fell to $132 million
from $267 million reported a year earlier due to additional
expenses of $60 million associated with the deal.
    "These results were also achieved against a backdrop of
significantly higher recovered fiber costs and lower corrugated
box prices. We expect these increased costs will be recovered
through increased box pricing with the customary time lag," said
CEO Tony Smurfit.
    The Ireland-based company's revenue fell 3% to $2.97 billion
in the quarter ended June 30.

 (Reporting by Aatrayee Chatterjee in Bengaluru; editing by Alan
Barona)
 ((Aatrayee.Chatterjee@thomsonreuters.com;))