DS Smith reports profitable annual results

United Kingdom-based packaging producer DS Smith Plc, saying “through clear and consistent strategic direction we have positioned our business as a solely fiber-based group,” has reported profitable results for its 2020/2021 fiscal year, which ended April 30, 2021.

Saying it is “centered on innovation and sustainability,” DS Smith says its customers in the fast-moving consumer goods (FMCG) and e-commerce sectors started demonstrating “increasingly positive volume growth” during the second quarter of 2021.

The company continues, “Encouragingly, the momentum in packaging volumes seen in the second quarter has continued to build throughout the remainder of the financial year resulting in second-half growth of 8.2 percent.” The company had announced in late April that it anticipated good fiscal year results.

Materials to produce its boxes, including old corrugated containers (OCC), cut into profits, says the company. “The strong demand for packaging was accompanied by an increase in input costs, particularly in the fourth quarter of the financial year.” The company’s fourth quarter aligns with the first quarter of the 2021 calendar year, when OCC prices rose consistently.

The company also says its investments in the United States have been paying off. “Our U.S. operations have performed very well, particularly in the second half, with profit for the year up 70 percent (on a constant currency basis) compared to the prior year.”

Regarding the future, DS Smith states, “The continued investment in our business, together with the strong support of our customers and the momentum built over recent quarters, give us confidence for the current year and future.  The current [fiscal year, staring May 1, 2021] has started well, with the volume momentum of the final quarter of fiscal year 2021 continuing into this year.”

Miles Roberts, group chief executive, says, “The growth drivers of e-commerce sustainability and plastic-free packaging have accelerated over the last 12 months and we are very well placed to capitalize on this growth. We have worked hard over many years to focus our business purely on fiber-based packaging and this differentiation is clearly recognized by our customers.”