Paper prices have moved up sharply, packaging giant Smurfit Kappa said today after a “remarkable” start to the year fuelled by the online shopping boom.
Chief executive Tony Smurfit said his company had experienced strong corrugated volume growth “in practically every area and all markets in which we operate”.
The Dublin-based packaging giant revealed a 6% rise in underlying revenues to 2.3 billion euros (£2 billion) In the first quarter.
This has been accompanied by “unprecedented” industry wide shortages of supply and input cost pressures, with paper prices sharply higher.
The company’s packaging plants source most of their raw materials from the company’s own paper mills.
Smurfit reported an underlying margin of 17%, compared with 17.9% in the second half of 2020, and said it was recovering higher input costs in line with its expectations.
Shares reached a record high in February after the company posted a 10% rise in pre-tax profits to 748 million euros (£650 million).
Smurfit said: “Our strong first quarter performance has set the foundation for accelerated revenue and earnings growth as we move through 2021.”
As well as its e-commerce and retail packaging, the company has been selling paper-based social distancing products after it was found that the virus that causes Covid-19 has a shorter life span on corrugated than on other materials such as steel and plastic.