Packaging giant Smurfit Kappa has reported a 1 per cent revenue rise for the first quarter, and forecast that its earnings performance for 2012 will be in broadly line with last year.

First-quarter revenue rose to €1.8 billion, while operating profits were 20 per cent higher at €177 million.

The company’s Ebitda (earnings before interest, tax, depreciation and amortisation) was €3 million higher in the first three months of the year at €246 million, when compared to the equivalent period a year earlier.

Despite significant input cost pressure continuing into the first quarter and downward pressure on box prices, Smurfit maintained an Ebitda margin of 13.5 per cent. Chief executive Gary McCann said this reflected the efficiency of Smurfit’s integrated system in Europe.

Mr McCann said the group’s Latin American businesses also continued to perform well, contributing 23 per cent of its overall Ebitda for the quarter.

The company anticipates that its full-year Ebitda performance will be broadly in line with that delivered in 2011. “This will in turn support good free cash flow generation and further deleveraging, thereby continuing to expand our available range of strategic and financial options,” Mr McCann said.

In the first quarter, Smurfit successfully completed amendments to its senior credit facility, giving the group increased financial flexibility and extended debt maturities to 2016 and 2017, it said.

Last year Smurfit Kappa initiated a cost take-out programme designed to deliver a saving of €150 million by the end of 2012. During 2011, the initiative generated a benefit of €100 million, and in the first quarter of this year a further €30 million in savings was delivered.

The company said this partly mitigated the significant increases in input costs. Following a review of its cost base, Smurfit now believes it can push its total cost-saving target from €150 million to €200 million, which the result that it is now aiming for a saving of €100 million during 2012.

At Smurfit Kappa's agm this morning, the group's chairman Liam O'Mahony said that 2012 had started well, and that the expected outcome for the year was ahead of current market expectations.

The board recommended a final dividend of 15 cent for 2011, to be paid on May 11th, and said the group now has the capital structure and cash flow characteristics to sustain a progressive dividend stream.

Davy analyst Barry Dixon described today's set of results as "very positive", and reiterated an 'outperform' rating for the stock.