Smurfit Kappa likely to report strong results next week

Davy Stockbrokers forecasting ebitda of €303.6m for paper and packaging group


Paper and packaging group Smurfit Kappa is due to report second-quarter earnings next Wednesday, with strong results forecast.

Davy Stockbrokers is forecasting ebitda of €303.6 million, behind consensus estimates of €310 million, but up 7 per cent from the €285 million reported for the second quarter last year.

Davy was forecasting ebitda of €227.4 million in Europe, 2 per cent ahead of the €223 million reported last year, Davy analyst Barry Dixon said.

For the Americas division, it is forecasting ebitda of €86 million, up from €72 million during the same quarter last year.

“While we do not forecast net debt on a quarterly basis, we expect that the figure will be higher than at the end of 2015,” Mr Dixon said.

Net debt at the end of 2015 was almost €3.05 billion, and it was €3.03 billion at the end of the first quarter.

Smurfit Kappa sees its debt level falling from 2.5 times ebitda over the course of the year as recent acquisitions boost earnings and cash flow.

Davy noted the share price of Smurfit Kappa is down more than 5 per cent over the past month, underperforming the European sector which is up 1.3 per cent.