Input costs still hurting Smurfit

The packaging group’s performance continued to suffer as a result of the increased cost of recovered fibre, especially in the Americas. Prices increased by more than €120m for the year, with the group anticipating input cost pressures for the foreseeable future. On the plus side, the group has been able to pass these increases through to customers. It raised Kraftliner costs in Europe by €150 per tonne during the year, while recycled containerboard was up €100 per tonne. Increases of €60 for both were announced in December last year and will be implemented this month for the most part.

Performance diverged between the group’s European and American businesses, with the latter impacted by negative currency movements and “adverse natural events”. However, the American businesses account for a little over a quarter of the group’s revenues, so the update was largely welcomed. Analysts at Investec are forecasting adjusted pre tax profit of €729m in 2018, giving EPS of 232¢ (2017: €618m, 200¢).