Smurfit Kappa (SKG), the paper-based packaging manufacturer, has reported a good performance in the first half of 2008 in the face of rising costs and falling demand for corrugated products.
      SKG recorded revenues of ?3.68bn (£2.8bn) in the six months to 30 June, a 1.5% increase on the same period in 2008. Operating profit before exceptional items rose by 4% to ?312m.
      Corrugated price increases in the first quarter contributed to an 18% rise since December 2005 and the firm maintained its prices in the second quarter.
      Demand for corrugated products was weaker in May and June after positive growth in the first four months of the year. Nonetheless, second quarter pre-tax profit rose by 95% to ?83m.
      SKG continues to face increases in energy and raw material costs, and closed a 130,000-tonne containerboard facility in Valladolid, Spain, in June. It reported that its kraftliner business is suffering from a weak dollar that benefits US exports.
      Chief executive Gary McGann said the firm was in a condition to weather the "challenging conditions" it expects in the remainder of the year.
      "SKG is well positioned to outperform its peers and deliver strong returns across all metrics through the cycle," he said.

Wed Aug 13 12:45:00 CDT 2008