Last week, the Smurfit Kappa Group (SKG), published its results for the first half of the year. Despite the global crisis, the Irish paper and packaging producer showed a srtrong resilience, and its board decided to maintain a dividend payment
Tony Smurfit, Group CEO, commented:
“We are very pleased to report another strong performance across all our key metrics for the first half of 2020. Our EBITDA of €735 million with a margin of 17.5%, together with strong free cash flow of €238 million, demonstrate the strength of the Group.
“I remain incredibly proud of the entire SKG team who have delivered these results against the backdrop of COVID-19, which created an extremely challenging operating environment. Our key priorities have been, and continue to be, the health, safety and well-being of our 46,000 employees and the continuity of supply to our 65,000 customers. The strength and scale of our integrated system and our supply chain expertise meant we were able to ensure the continuity of supply of essential products for everyday life across multiple sectors. We are again proving that our business model, geographic diversity and our commitment to innovation and sustainability continue to deliver.
“Our European business performed strongly in the first six months with an EBITDA margin of 17.6% and flat corrugated box volumes.
“The EBITDA margin of the Americas business improved again year-on-year from 17.1% to 19.0%.
“During the first six months, the Group completed its largest ever investment, €134 million, in a recovery boiler in Austria. I am happy to report that this will reduce our CO2 emissions by 40,000 tonnes or a further 1.5% towards the Group’s sustainability emissions target.
“Paper-based packaging is renewable, recyclable and bio-degradable. Together with the mega-trends of e-commerce and the consumers’ desire for sustainable packaging solutions, corrugated is the most innovative and sustainable transport and merchandising solution. SKG is uniquely positioned to capitalise on these long-term trends with its unrivalled market offering and SMART business applications that enable our customers to increase sales, reduce costs and mitigate risk. In an increasingly complex world, SKG is the packaging partner of choice.
“SKG has again demonstrated its strength and the consistency of its delivery through these results. This performance reflects: targeted capital investment; effective acquisitions; a continued focus on innovation and sustainability; and, above all else, the quality of our people. SKG will remain agile and resilient, continuing to deliver, and while known macro and economic risks remain, we are confident in our future prospects.
“In April, in light of the macro uncertainty due to the COVID-19 pandemic, the Board acted prudently in withdrawing its recommendation to pay a final dividend of 80.9 cent per share. We stated at that time that the Board remained committed to providing shareholders with an attractive dividend stream. Consequently, the Board has now decided to pay an interim dividend of 80.9 cent per share, the equivalent amount of the withdrawn final dividend. This decision underscores the Board’s belief in the inherent strengths of the SKG business, its balance sheet, free cash flow generation and its long-term prospects and our recognition of the importance of dividends to shareholders.”