The fall came despite strong growth in Latin America, which accounted for 60 per cent of the group's operating profits of pounds 107.7m. The company blamed poor demand and weak prices in its European and US markets for the slippage, and warned that jobs might be lost as operations were restructured.
Profits plunged in the UK, from pounds 13.6m to pounds 4.7m. Paddy Wright, managing director of Smurfit UK, said: 'We've had a terrible time, as the recession proved longer and deeper than expected.' But he said there were signs of a recovery, with a rise in order books in the past four weeks.
The group's North American operations fell into losses of pounds 1m against profits of pounds 8.2m the previous year.
Ray Curran, chief financial officer, said: 'Normally we're disappointed by a drop like this but in the circumstances it is a very creditable result. We have suffered inevitably as an industry and as a company.'
But profits were also dented by a pounds 29.6m exceptional restructuring charge and a below-the-line extraordinary charge of pounds 19.3m connected to the refinancing of its US joint venture.
The exceptional charge was a provision against rationalisation on the Continent, especially in Spain. 'Spain is a very difficult country for us and we are looking at restructuring the business there,' Mr Curran said.
'We have closed Eppic, our associate company there, but we have yet to decide if any other operations will go, but the provision is there to clear the decks.' He added that at worst 1,000 jobs would be lost. Spanish sales declined 7 per cent to pounds 85m.
Germany also proved problematic for Smurfit, with turnover dropping 11 per cent to pounds 55.5m. Mr Curran said that the gathering recession in Germany had led to over-capacity and falling prices.
He acknowledged that Smurfit was looking at linking up with a partner in Europe to achieve critical mass.
He was more optimistic about prospects for the US. Smurfit intends to float its US associate in the future, probably by way of an international placing and offer.
Mr Curran said: 'We're not convinced the down cycle is over, but with our strong balance sheet and net cash, we're well-positioned to take advantage of the recovery in what is a very cyclical business.'
The dividend rises 5.7 per cent to 3.74p on earnings per share that fell to 11.8p from 24.4p. The shares lost 4p to 243p. Richard Johnson, analyst at Hoare Govett, forecast pre-tax profits of pounds 129m for 1993/94 and earnings per share of 17.8p.Reuse content