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Smurfit battles President Maduro

The packaging company's reported losses belie a positive year for the group
February 13, 2019

Smurfit Kappa (SKG) has been through a tumultuous year, resisting the advances of US paper group International Paper before seeing its Venezuelan operation taken over by President Maduro’s government.

IC TIP: Hold at 2,326p

The 90-day takeover prompted Smurfit to deconsolidate the plant. This explains the packaging group’s swing into a full-year loss, as it incurred a €1.3bn (£1.1bn) non-cash charge to its income statement. Strip this out, along with a few minor exceptional items – including defence costs in relation to International Paper – and Smurfit delivered pre-tax profit growth of 56 per cent. In spite of its experiences with takeovers, friendly and hostile, Smurfit Kappa demonstrated underlying growth across the board. The group closed out the year with increased sales volumes, while free cash flow came in at €494m against €307m in 2017.

Analysts at Goodbody forecast adjusted EPS of 306¢, up from 297¢ in FY2018.

SMURFIT KAPPA (SKG)  
ORD PRICE:2,326pMARKET VALUE:£5.5bn
TOUCH:2,324-2,328p12-MONTH HIGH:3,306pLOW: 1,915p
DIVIDEND YIELD:3.7%PE RATIO:na
NET ASSET VALUE:1,163¢*NET DEBT:108%
Year to 31 DecTurnover (€bn)Pre-tax profit (€m)Earnings per share (¢)Dividend per share (¢)
20148.0837810655.4
20158.1159917368.0
20168.1665418979.6
20178.5657617787.6
20188.95-404-27497.6
% change+4--+11
Ex-div:11 Apr   
Payment:10 May   
*Includes intangible assets of €2.6bn, or 1,092¢ a share.  £1=€1.14