DS Smith PLC (LSE:SMDS) said box volumes have grown very strongly compared to 2020 and 2019 levels, while the price of paper keeps rising due to higher costs of energy and transportation.
However, the packaging firm said that strong demand has helped to recover the price increases.
READ: DS Smith, Mondi and Smurfit Kappa all worth buying as broker questions whether "peak pricing" has been reached
Trading continues to progress well, with strong growth in the US and Southern Europe and with fast-moving consumer goods (FMCG) customers. Industrial customers have also seen significant increases in demand but they are a small part of the group’s portfolio.
The volume growth has been driven by continued strength in the e-commerce and consumer sectors, trends accelerated by the pandemic.
Construction of the additional packaging manufacturing sites in Italy and Poland is proceeding to plan and they are expected to begin operations in the fourth quarter of the current financial year.
Both plants have already received advanced commitments from customers for over 50% of their capacity. The new sites are in part being funded by the recently announced proposed disposal of the non-core De Hoop paper mill.
Shares advanced 2% to 459.2p on Tuesday morning.
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