DS Smith reports declines in revenue, profits

DS Smith, a London-based paper and packaging company, has reported a 4 percent decline in revenue and an 89 percent decline in profits in the first half of its 2024-2025 fiscal year compared with the prior half-year’s results.

DS Smith says its 39 percent decline in half-year-on-half-year operating profits are in line with its expectations despite ongoing challenging market conditions.

The company experienced higher input costs, notably fiber and paper, in the six months from May to October, but says those costs were broadly offset by cost reduction and productivity initiatives.

DS Smith, which is in the process of being acquired by Memphis, Tennessee-based International Paper (IP), says about $95 million in costs were related to that transaction reflected in its six-month balance sheet, explaining part of the spread between operating profits and net profits.

The company says it also has continued capital and operational investments to drive long-term productivity and environmental efficiency as it prepares to merge with IP.

DS Smith and IP shareholders “overwhelmingly voted in favor” of the merger.

“We have maintained our relentless focus on customer service, product quality and innovation, together with significant cost and productivity initiatives, to mitigate the impact of a softer-than-expected overall market,” DS Smith Group Chief Executive Miles Roberts says of the company’s recent half-year results.

“Looking forward, whilst recognizing the recent paper price weakness, we continue to expect modest growth in packaging volumes and increasing sequential prices to recover higher input costs."

Regarding the merger, he says, “Our planning for the integration of our businesses is progressing well and we remain excited about the opportunities for customers, employees and shareholders.”