Smurfit Kappa reports income drop in final premerger quarter

Smurfit Kappa Group, which is in the process of changing its name to Smurfit Westrock after its acquisition of Atlanta-based paper and packaging company WestRock earlier this year, has reported second quarter 2024 net income that is less than half of its figure from a year ago.

The Dublin-based maker of recycled-content containerboard and other packaging grades of paper and board also says that because of the timing of the completion of its merger with WestRock, results for Smurfit Westrock will be reported from the third quarter 2024.

In its final quarter as Smurfit Kappa Group, the company reported net sales of $3 billion, down less than 3.5 percent from the second quarter of 2023. However, its second quarter 2024 net income of $132 million represents a 50.5 percent drop from the $267 earned one year earlier.

“I am pleased to report a strong set of results and continued delivery of quality and service for our customers," Smurfit Kappa President and CEO Tony Smurfit says despite the income drop. "This has been driven by our performance‑led culture, together with the continuing benefits of our prior year capital allocation decisions.”

He points to the rising cost of old corrugated containers (OCC) and recovered paper as a challenge for Smurfit Kappa.

“These results were also achieved against a backdrop of significantly higher recovered fiber costs and lower corrugated box prices,” he says. “We expect these increased costs will be recovered through increased box pricing with the customary time lag.”

Smurfit does express optimism about the merger of WestRock’s sizable operations into Smurfit Kappa Group.

“On July 8, Smurfit Westrock listed on the New York Stock Exchange and was included in the S&P 500,” he says. “While we don’t underestimate the amount of hard work ahead of us, there is tremendous energy and enthusiasm to ensure a successful future for Smurfit Westrock. I believe that with the quality of our people and the strength of our market positions we are creating something truly unique.”

The company lists 17 types of packaging as part of its portfolio, along with fiber procurement. Smurfit Westrock also includes “sustainability leadership” as one of its five “key pillars.”

“The circular economy has long been the core of our business," Smurfit Westrock says. "We use renewable, recyclable, and recycled materials to create innovative, sustainable packaging solutions. As a leading recycler, we play our part in ensuring that at their end-of-life, our products are recycled.”