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Smurfit Kappa ups dividend after underlying earnings beat expectations

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Smurfit Kappa PLC (LON:SKG) has increased the final dividend after full-year underlying earnings (EBITDA) came in ahead of guidance.

The paper and board maker upped the distribution by 8% to 87.4 cent per share as chief executive Tony Smurfit said the demand trends seen during the fourth quarter have continued into the new year, although COVID-19 uncertainty remains.

READ: Smurfit Kappa announces new sustainability and diversity targets

“Driven by strong secular trends such as e-commerce and sustainability, the outlook for our industry is increasingly positive,” he commented in the final results.

In the year to December 31, revenue shed 6% to €8.5bn while EBITDA lost 9% to €1.5bn, though it was above guidance of €1.46-1.48bn. Net debt was cut by 32% to €2.3bn.

Both Europe and the Americas saw strong demand in the fourth quarter offsetting significantly higher input costs, mostly in recovered fibre.

The FTSE 100 firm also repaid government support received during the pandemic while it made investments of €35mln to boost operating efficiency, with benefits expected to be realised in two years.

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