Smurfit Kappa Group reduces debt by €218 million in 12 months

By Lisa Kerner

Charlotte, N.C., Aug. 1 - Smurfit Kappa Group plc reduced its net debt by more than €500 million in the last two years, with €218 million cut in the last 12 months, according to the company's second-quarter 2012 earnings release and presentation on Wednesday.

Net debt at the end of the first six months was about €2.79 billion, down 7% from the prior-year period.

The company also reported EBITDA of €500 million for the first half of the year, a figure boosted in part by the relatively stable box prices in the period.

First-half performance benefited from Smurfit's position in the consolidated kraftliner market, the company said.

Smurfit reported second-quarter free cash flow of €63 million. Free cash flow for the first six months was €47 million, down 40% compared to the prior-year period. The company said it expects free cash flow to accelerate in the second half of the year.

At $3.6 billion, revenue for the first half of the year was flat compared to the same period last year.

Smurfit ended the first half of the year with a net debt-to-EBITDA ratio of 2.8 times, well within its targeted range, and an EBITDA margin of 13.6%.

The company's board of directors intends to pay an interim dividend of 7.5 cents per share in October.

Dublin-based Smurfit Kappa is a producer of paper-based packaging.

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