The continuing poor performance of the US economy has damaged profitability at Jefferson Smurfit. The Irish packaging group reported pre tax profits for 2001 of #8364;386 million, 20 per cent down on the previous year.
Earnings at Smurfit’s US associate, Smurfit-Stone Container Corporation (SSCC), were especially disappointing.
US corrugated demand fell 5.4 per cent last year its steepest decline since the recession of 1975. This also marks two years of consecutive decline, demand having declined 0.9 per cent in 2000.
Smurfit added that while SSCC’s debt situation had improved and its specific business fundamentals had improved, conditions within the US industry are the "subject of further discussion."
The group was noticeably less sanguine than other companies in its outlook. It said it did not believe that the prospect of second quarter 2002 recovery is "best case and not base case."
It said the North American containerboard industry must learn to live with a strong dollar. "The progressive erosion of the North American industry's 'low cost producer' status should serve as a catalyst for the further retirement of inefficient capacity," it added.
In his last results statement as chief executive, Dr Michael Smurfit said Jefferson Smurfit has been consistently profitable and had delivered on its strategic and financial commitments.
"Our track record in terms of dividends is unparalleled within this industry." Dr Smurfit said.
"We have paid more to the market than we raised, sustaining a dividend increase in each of the last 10 years. I will remain as a significant stockholder in JSG," he added.