Smurfit suffers €142m cut in assets

Packaging giant Smurfit Kappa has suffered a €142 million reduction in assets following the devaluation of Venezuela's currency.

The Venezuelan government announced the devaluation of its currency, the bolivar fuerte (VEF), on February 8th. The official exchange rate was changed from VEF 4.3 per US dollar to VEF 6.3 per US dollar.

As a result of the devaluation, Smurfit will record a reduction in net assets of approximately €142 million and a reduction in the euro value of the Group’s cash balances by approximately €29 million in the first quarter of 2013.

In a statement, the company indicated that the impact on 2013 earnings before interest, taxes, depreciation, and amortisation (Ebitda) is not material.

Earlier this year, the paper and packaging company reported an 11 per cent increase in 2012 pre-tax profits to €331 million.

Colgate-Palmolive said it will incur a one-time loss of $120 million, or 25 cents per share, in the first quarter of 2013, related to the devaluation of the Venezuelan currency.

The company expects earnings to be reduced by 5 cents to 7 cents per share per quarter in 2013, due to the translation of financial statements at the new Venezuelan exchange rate.