Smurfit Kappa Group plc (LON:SKG) saw a massive increase in volumes shipped in the first quarter but the packaging giant also saw costs rise significantly.
The first three months of 2021 saw underlying revenue growth of 6% to €2,269mln from a year earlier.
Underlying earnings (EBITDA) clocked in at €386mln, the Irish group said in its trading update, giving an EBITDA margin of 17.0%.
“The first quarter was remarkable in many ways. We had strong corrugated volume growth in practically every area and all markets in which we operate. With unprecedented industry wide shortages of supply and input cost pressures, paper prices have moved up sharply. We are recovering these input costs in line with our expectations,” said Tony Smurfit, the chief executive officer.
Corrugated volume growth in the first quarter was up roughly 7% in both Europe and the Americas.
Container-board prices increased in the first quarter and carried on rising at the start of the second quarter as a result of strong demand and higher recovered fibre and other costs. Smurfit’s recovered fibre cost increased by around €90mln versus the first quarter of last year.
In addition to cost pressures, the industry is experiencing supply disruptions and shortages of packaging papers globally, the FTSE 100 company added.
Shares in Smurfit Kappa were up 2.3% at 3,646p.