DS Smith has reported a strong start to the year despite the ever-rising energy prices
In a trading update, the corrugated giant reported that “good cost control” and “pricing momentum” meant that business was in line with its expectations.
It added that corrugated box volumes in the first quarter fell slightly. It said that currently “more than 90% natural gas costs hedged for full year 2023 and circa 80% for full year 2024 with costs being recovered through increased packaging pricing”.
DS Smith said that “long term supplier relationships and other cost management programmes ongoing to mitigate inflation”.
Miles Roberts, DS Smith Group chief executive, said: “We have started the financial year very strongly, despite the current macro-economic conditions. We are focusing on ensuring the highest levels of security of supply and customer service and are very pleased with the ongoing support we receive from both our customer and supplier base. Whilst the industrial sector is showing some weakness, our FMCG business remains resilient.
“The increased profitability and cash generation is being driven by improving efficiency and cost increase mitigation as well as successfully continuing to raise packaging prices. Overall returns on capital remain within our medium-term target.
“As we enter the second quarter, we are very mindful of the challenging economic environment in which we operate and the impact it has on both our customers and colleagues. However, our operating plans and progress to date continue to give us confidence in our outlook for full year 2023.”
Source : Packaging News
