Smurfit Kappa's full-year profits will be lower than expected because of the rising cost of raw materials.
The Dublin-based packaging and paper group said in a trading update this week that it continued to experience "significant input cost pressure", which would have an impact into the fourth quarter of 2007.
However, it also said it would report quarter-on-quarter EBITDA growth for the third quarter, increased margins and a "significant increase in free cash flow", which would be used to reduce debt.
While Smurfit Kappa has forecast lower profits, rival DS Smith said last week (17 October) that its UK Paper and Corrugated Packaging segment had "benefited strongly" from price increases for corrugated case materials, which were put in place to recover a substantial rise in energy and waste paper costs.
The firm said it expected price increases pushed through in the second half of 2006/07 to boost pre-tax profits to more than £50m in the first half of the current financial year.
Source: packagingnews
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