Smurfit Kappa, the Irish cardboard box-making giant, said on Friday that it is in mediation with representatives of indigenous in Colombia who claim a historic right to land controlled by the company in the South American country.
The comments came as a group of about 30 protesters, including members of Ekō, the non-profit group, Latin America Solidarity Campaign (Lasc), Environmental Paper Network and People Before Profit TD Richard Boyd Barrett on Friday campaigned outside Smurfit Kappa’s annual general meeting (agm) in Dublin for the second year in a row on behalf of the indigenous communities that assert an ancestral heritage to the land owned.
Colombia is home to Smurfit Kappa’s largest plantations, with two-thirds of its 68,000 hectares of land in the country planted with commercial forests and most of the remainder made up of natural forests. The Irish multinational, which entered the Colombian market in 1986, has insisted that the claims over its land are “without merit”.
However, an independent mediation process, overseen by Colombia’s Javeriana University, was established last December, with three meetings held since then and more planned later this year, Smurfit Kappa disclosed on Friday.
“We have an absolute right to the land that we have, but we are prepared to negotiate and mediate,” group chief executive Tony Smurfit told reporters after the meeting.
Meanwhile, Smurfit Kappa revealed in a short trading statement ahead of the agm that its debt burden had fallen to a record low level at the end of March, as its earnings rose 19 per cent during the first three months of the year.
The jump in profits came even as sales dipped 1 per cent during the period, with comments from the company in a brief trading update hours before its agm suggesting that the volume of corrugated boxes sold during quarter was down 6-7 per cent on the year amid a weakening global economy.
The group’s net debt stood at €2.94 billion at the end of the reporting period, equating to 1.2 times earnings before interest, tax, depreciation and amortisation (ebitda) for the previous 12 months, the company said in a brief trading statement.
The ratio was down from 1.3 times at the end of December, which the company had previously said was an all-time low level, and 1.6 a year earlier.
The state of the balance sheet means that “Smurfit Kappa has never been better positioned to continue to develop and take advantage of opportunities as they present themselves either through organic investments or acquisitions”, Mr Smurfit said.
Ebitda rose 19 per cent to €579 million in the first quarter, though revenues declined by 1 per cent to €2.99 billion, the company said. Its ebitda margin widened to 19.3 per cent from 17 per cent.
“This performance reflects the continuing benefits of our integrated model, the effectiveness of our capital spend, our constant focus on innovation for customers and our geographic footprint,” said Mr Smurfit.
Mr Smurfit said its sales volumes had declined year on year as demand was “broadly in line with the fourth quarter of 2022″. Goodbody Stockbrokers’ David O’Brien highlighted that this implies that volumes fell by 6-7 per cent during the reporting quarter, though box prices remained more than 10 per cent ahead on the year.
“We expect the demand environment to improve as the year progresses and SKG is well placed across our geographies to take advantage of this,” said Mr Smurfit.
