DS Smith starts out fiscal year profitably

United Kingdom-based containerboard and packaging producer DS Smith PLC boosted its revenue by 28 percent and its pretax profits by 80 percent in the six months running May 1-Oct. 31, 2022, which is the first half of its 2022-2023 fiscal year.

“We are particularly pleased with the performance of the Southern Europe region that continues to deliver major benefits from the acquisition of Europac in 2019,” says DS Smith Group Chief Executive Miles Roberts of the increases compared with the period covering mid-2021.

“The performance during this six-month period has been strong, benefiting from our constant focus on our customers’ evolving needs during this time of significant economic volatility,” Roberts adds. “This has enabled us to achieve continued market share gains, an increase in profitability and improvements in our key financial performance ratios.”

In North America, DS Smith says its packaging volumes shipped “declined slightly, reflecting the overall economic environment and labor shortages [that] temporarily restricted our production capacity.” Despite those hurdles, the company says its revenue in North America increased by 11 percent compared with mid-2021, “principally reflecting the increases in paper and packaging prices.”

While DS Smith's profits rose by 107 percent in its Southern Europe region and 23 percent in its Eastern Europe region, they rose by just 19 percent in North America in this fiscal year’s first half compared with the prior one.

Energy and economic concerns caused the board producer’s Northern Europe region to experience difficulties in the most recent half-year. “In Northern Europe, organic corrugated box volumes across the region declined more than the [company] average, with U.K. and Germany showing higher levels of decline due to overall economic conditions, including some customers limiting production to reduce energy usage,” states DS Smith.

Looking ahead, the company writes in comments accompanying its results, “The macroeconomic outlook for the rest of the financial year remains challenging. However, we have an excellent customer base, efficient high-quality assets, dedicated colleagues and a strong balance sheet allowing continued organic investment to support our customers. These benefits, combined with current momentum in the business, mean we now expect fiscal year 2023 performance to be ahead of previous expectations with the second half being consistent with the first half.”