Smurfit Stone, the US associate operation of the Jefferson Smurfit group, has reported a 70 per cent drop in after-tax profits to $24 million ( #27.5 million) in second quarter earnings.
Announcing the out turn yesterday, the company blamed higher energy costs, a decline in prices for containerboard and pulp and additional mill downtime for the decline.
The Smurfit Stone president and chief executive officer, Mr Ray Curran, said the group will need to see an appreciable increase in corrugated container demand to see a significant improvement in results. "Our strategy of debt reduction, cost reduction and producing to meet actual demand has positioned us to remain profitable in this difficult economic environment," he said. The results include a $4 million pre-tax restructuring charge related to the shutdown of a boxboard machine in Los Angeles. For the three months to end of June, sales were $2.1 billion down from $2.2 billion in the same period last year. Sales for the first half of this year were $4.3 billion, compared to $4.2 billion in 2000.
Mr Curran said price declines for containerboard and corrugated containers were modest given the weak demand. "Corrugated container prices were relatively stable in the second quarter compared to the first." Smurfit Stone produces containerboard, corrugated containers and is the world's biggest paper recycler. It has 300 facilities worldwide and employs 40,000.
