IRELAND – Smurfit Westrock has released the financial results for the second quarter of 2024 of Smurfit Kappa Group.

Smurfit Kappa Group’s net sales for Q2 stood at approximately US$3 billion, reflecting a decrease of US$107 million (3%) from US$3.08 billion in the same period last year.

This decline was primarily driven by lower average box pricing in the company’s European business year-on-year.

The decrease was partially offset by a 3.1% increase in group corrugated volumes (1.1% on a daily shipment basis), a US$28 million net positive foreign currency impact, and a US$4 million positive impact from acquisitions.

“I am pleased to report a strong set of results and continued delivery of quality and service for our customers. This has been driven by our performance-led culture and the continuing benefits of our prior year capital allocation decisions,” said Tony Smurfit, president and CEO.

“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.”

In the second quarter, Smurfit Kappa’s corrugated volume growth was 3.1%, with Europe seeing a 3.5% increase and the Americas experiencing a 1.5% rise year-on-year.

“On a shipments per day basis, volume growth was 1.1% for the group, with growth of 1.4% and 0.1% in Europe and the Americas respectively,” detailed Smurfit.

“Demand in Southern and Eastern Europe remained robust, while German demand remained soft. In the Americas, demand was generally good, except Argentina.”

Following the quarter’s end on July 5, Smurfit Kappa Group completed its merger with WestRock Company.

On July 8, Smurfit Westrock listed on the NYSE and was included in the S&P 500. Due to the timing of the merger, results for the combined company will be reported from the third quarter of 2024.

In Q2, net income decreased by US$135 million, reaching US$132 million, down from US$267 million in the same period last year.

This decrease was mainly due to a decline in net sales and additional transaction-related expenses of US$60 million associated with the Smurfit Westrock merger, partially offset by a US$12 million decrease in costs of goods sold due to lower raw material and energy costs year-on-year.

Adjusted EBITDA for the group was US$480 million, with an adjusted EBITDA margin of 16.2% in Q2 2024, compared to US$556 million and an adjusted EBITDA margin of 18.1% in Q2 2023.

 

Regional Breakdown

In Europe, adjusted EBITDA decreased by US$77 million to US$355 million in Q2 2024 from US$432 million in Q2 2023.

This decline was primarily due to a US$143 million decrease in net sales and increased labor, distribution, and recovered fiber costs, partially offset by decreased energy and other raw material costs.

The adjusted EBITDA margin in Europe was 16.1% in Q2 2024, compared to 18.4% in the same period last year.

In the Americas, adjusted EBITDA increased by US$6 million (4%) to US$146 million in Q2 2024 from US$140 million in Q2 2023.

This increase was primarily due to a US$36 million rise in net sales, partially offset by higher raw materials and labor costs. The adjusted EBITDA margin in the Americas was 19.2% in Q2 2024, compared to 19.3% in Q2 2023.

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