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Smurfit Kappa Eager for Deals
August 16, 2008 Official Board MarketsEurope’s largest paper and packaging group, Smurfit Kappa, has not ruled out making acquisitions over the next year as some industry operators struggle to survive due to rising costs and crimped demand.
Reporting better-than-expected second quarter results last week, with earnings of approximately $489 million and revenues of 3.509 billion, Smurfit Kappa’s chief executive Gary McGann says the company is ready to explore any options that may arise.
“We don’t have a slate of targets, but the best buying can be done during a downturn,” he says.
Smurfit Kappa’s improved net debt position also leaves it in a position where it can more comfortably pursue deals that could arise in the event of industry consolidation.
“There are huge opportunities,” McGann says. “Over many of these cycles we have put together some of the best parts of our asset base.”
He adds that reducing debt will be a continuing focus for the company.
McGann says he expects conditions in the market to "remain challenging" for the remainder of 2008 but he does not envisage altering full-year guidance.
He downplayed speculation of an imminent return by Smurfit Kappa to the Chinese market, saying that while the country can’t be ignored, there are no specific targets being examined. Jefferson Smurfit, the forerunner to Smurfit Kappa, previously had a presence in China but exited in 2003.
