Smurfit hopeful of upturn despite flat profits

Jefferson Smurfit, the Irish paper and packaging group, yesterday unveiled flat first-half profits despite taking a hit in the troubled US market.

Dermot Smurfit, joint deputy chairman of the family business, said the US economic downturn had affected business badly but pricing had held up remarkably well due to a determined effort by the industry to manage inventories.

The company saw a marked slowdown in the pace of global demand growth in the second quarter but said it was hopeful for the mid-term future and was well placed for an upturn.

"We do see a recovery but don't ask me when," said Dr Smurfit. "We do know Europe is slowing down but in the US, the second quarter was not as bad as the first quarter."

The Dublin-based company posted pre-tax profits of 175m euros (£110m) on turnover up 5 per cent to 2.33bn euros. Net sales in the US and Canada were down 4 per cent to 336m euros, but increased by 5 per cent to 1.6bn euros in the European operations and by 14 per cent in Latin America to 428m euros.

John Sheehan, analyst at NCB Stockbrokers in Dublin, said: "They are talking about a recovery in the sector but given conditions in the US economy, I think that's a good way off."