UK-based paper packaging producer DS Smith PLC said it expects adjusted operating profit of up to $768 million for its financial year ending at the end of April.
In a business update issued to investors, the company and its group chief executive, Miles Roberts, cite “the continued momentum [with] good progress in profitability and cash generation” over the last six months.
The company claims to have utilized “the continued increase in packaging prices” which has “more than offset the continued increases in input costs.” Among its raw materials are old corrugated cardboard containers (OCC) and other grades of scrap paper used to make its container board.
Regarding its finished products, DS Smith reports “volume growth of identical corrugated boxes of at least 5% for the year”, referring to the period from May 1, 2021 to April 30 of this year.
Although Russia’s invasion of Ukraine has produced ripple effects in terms of energy costs and other factors, the company says its “only involvement in these countries is a minority investment in a Ukrainian company.” . [that] serves customers primarily in Ukraine with limited sales in Russia. We have no other operations or employees in Russia.
Roberts said, “I am pleased with the company’s continued momentum and performance in another year disrupted by COVID-19 and macro-economic uncertainty amplified by the Russian invasion of Ukraine. We saw continued good momentum across our customer base, with volumes from our fast moving consumer goods customers growing particularly well, supported by consistently high levels of service and product quality.
Roberts says DS Smith’s Eastern and Southern Europe regions “performed above the group average”, while in the US the company “sees site benefits from the Indiana contributing to very strong volume growth in the region.”
Roberts adds, “We continued to make good progress on our sustainability goals and, in January 2022, we committed to aligning our global operations with the industry-leading 1.5 degree Celsius scenario, as set out in the Paris Climate Agreement.
He concludes: “We have continued to invest in our business, leveraging our scale, deep customer relationships and sustainable innovative solutions to lead the transition to a more circular economy, providing a solid platform for growth. We are aware of the volatile macro-economic environment, but have seen little to no sign of change in client behavior so far and are entering the next financial year with confidence.