DS Smith reports boost in profits

DS Smith, a London-based paperboard and packaging maker that also has operations in the U.S., has reported double-digit increases in operating profits and earnings per share in its fiscal year ending April 30.

The company says its 2021/2022 results show “continuing momentum” in the form of a 64 percent boost in profits before tax, 27 percent growth in adjusted earnings per share and a 21 percent increase in revenue compared with the prior fiscal year.

“It has been another year of volatile trading conditions where we have worked through the tail end of the pandemic and, more recently, the tragic events of the Russian invasion of Ukraine,” says Miles Roberts, the company’s group chief executive.

Roberts continues, “We have delivered strong operational, environmental and financial results. The actions we have taken, driven by our strategic focus on our customers and their changing needs, including an ever-increasing focus on sustainability, have resulted in record volume growth. This, together with price increases which have offset significant cost inflation, has driven a strong improvement in profitability and high cash generation.”

The company says it continues to invest in the paperboard section, with the recently completed fiscal year including an investment in a new greenfield site in Italy that is now operational and one in Poland “currently being commissioned.”

In its new fiscal year that started May 1, DS Smith points to capital expenditures it says will increase to approximately $615 million “to invest in customer-led growth opportunities, including sustainability, at attractive financial returns.”

Looking ahead to future results, DS Smith says, “Despite a more challenging backdrop, the structural growth drivers together with a resilient fast-moving consumer goods (FMCG) customer base and our compelling offering underpin our confidence for fiscal year 2022/2023.”

The company is forecasting corrugated box volume growth of 2 percent to 4 percent for the current fiscal year, which would be lower than the 5.4 percent growth rate achieved in the completed 2021/2022 fiscal year.

In the recently completed fiscal year, DS Smith says it experienced 10 percent revenue growth in its North American operations. “Packaging volumes in the region have continued to see the strongest increases within the group, reflecting continued excellent customer traction with growth across a number of packaging sites and the increasing utilization of the box plant in Indiana,” the company says.