Packaging giant Smurfit Kappa has reported a 20 per cent rise in operating profit in the first quarter and has said 2012 earnings will be broadly in line with last year – ahead of analyst expectations.

First-quarter revenue rose 1 per cent to €1.8 billion, while operating profits were 20 per cent higher at €177 million.

Earnings before interest, tax, depreciation and amortisation (ebitda) were €3 million higher in the first three months of the year at €246 million when compared with the equivalent period a year earlier.

Despite significant input cost pressure and downward pressure on box prices, Smurfit maintained an ebitda margin of 13.5 per cent. Smurfit chief executive Gary McCann said this reflected the efficiency of Smurfit’s integrated system in Europe.

Mr McCann said the group’s Latin American businesses also continued to perform well, contributing 23 per cent of its overall EBITDA for the quarter.

The company anticipates its full-year EBITDA performance will be broadly in line with that delivered in 2011. “This will in turn support good free cashflow generation and further deleveraging, thereby continuing to expand our available range of strategic and financial options,” Mr McCann said.

In the first quarter, Smurfit completed amendments to its senior credit facility, giving it increased financial flexibility and extended debt maturities to 2016 and 2017, it said.

Last year Smurfit initiated a cost take-out programme to deliver a saving of €150 million by the end of 2012. In 2011, the initiative generated a benefit of €100 million, and in the first quarter of this year a further €30 million in savings was delivered. The company said this partly mitigated increases in input costs. Smurfit now believes it can push its total cost-saving target to €200 million, and it is now aiming for a saving of €100 million during 2012.