Smurift Kappa has reported earnings of nearly €2.4bn at an EBITDA margin of 18.4% for its 2022 financial year, an increase of 38% from 2021, with revenues up 27% to €12.8bn.

Profit at the Irish-founded paper and packaging group jumped 42% to €1.3bn, and the company recorded a return on capital employed of 21.8% while reducing its net debt to EBITDA ration to below 1.3x.

Smurfit Kappa saw pre-exceptional earnings per share growth of 62% to 444.1 cent last year, and it has announced a 12% higher final dividend of 107.6 cent per share.

Tony Smurfit, group CEO of Smurfit Kappa, described 2022 as "another highly successful year" for the company, adding that the performance reflected the benefits of its investment in innovation and sustainability initiatives.

"Our balance sheet metrics are the strongest in the group’s history, providing SKG with significant strategic and financial flexibility," he continued.

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Sales of boxes were down 2% in terms of volume due to inflation, which Smurfit said had "a negative effect on the demand environment," partially reversing "unsustainably" high demand levels seen during the pandemic.

"This slowdown was particularly evidenced in the latter part of the year, especially in the month of December, where we saw stock reductions and downtime taken by customers," he added.

Smurfit Kappa performed below expectations in Germany and the UK, but other markets such as Spain and France were less affected.

Box volumes in the Americas were stable year-on-year when excluding the acquisitions Argencraft and PaperBox, with growth in Mexico, Colombia, Brazil and Argentina offset by a weaker performance in North America.

The group reported EBITDA of €1.8bn for Europe and €553m for the Americas. Smurfit said "unprecedented" cost inflation, especially in the price of energy, moderated in the latter half of the year.

The group also invested €1bn in "long-term demand growth drivers" in 2022 while progressing toward its carbon footprint goals, having spent €2.3bn on growth, sustainability and cost reductions in he past two years.

The CEO said 2023 had started well and that the company has "never been in better shape strategically, financially and operationally.

"We have put ourselves in a position with the steps that we have taken and continue to take, to deliver high quality performance and to take advantage of the many opportunities we see around us."

(Pic: Karolis Kavolelis/Shutterstock)