Smurfit Kappa Group reported a 20 per cent rise in third-quarter core profit today and said it saw significant growth in the full year.
The Irish company, one of the world's biggest makers of paper and cardboard packaging, said earnings before interest, tax, depreciation and amortisation (EBITDA) rose to €275 million ($402 million) in the three months to the end of September.
Revenue in the period rose over 5 per cent to €1.83 billion versus analysts' estimates of 1.89 billion, while the EBITDA margin improved to 15.1 per cent from 13.2 per cent as the company passed higher costs on to customers.
"Current and expected trading conditions continue to be characterised by cost inflation and corrugated price recovery," chief executive Gary McGann said. "Assuming current market conditions prevail, SKG expects continued EBITDA growth for 2008."
The company said that for corrugated packaging, which is one of the its major products, it expected to deliver further price improvements in the fourth quarter and into 2008.
The company, which listed on the stock market in March, said it had increased its free cash flow to €150 million in the quarter from €64 million a year earlier and reduced net debt to €3.4 billion from almost €5 billion a year ago.
Shares in the company, which had been 1.2 per cent higher ahead of the results, extended their gains to trade 2.8 per cent higher at €13.10 in London by 12.20pm.
The stock was up 1.6 per cent in Dublin versus a flat Irish market.