Paper and packaging group Smurfit Kappa has reported pre-tax profits of €299 million for 2011, compared to €103 million a year earlier.

Moody's today placed Smurfit ratings under review for possible upgrade following the publication of its latest results and confirmation that the firm is to seek changes to its senior credit facility agreement.

Total revenue at Smurfit Kappa rose by 10 per cent to €7.36 billion while operating profit rose 44 per cent to €590 million.

Underlying earnings were up 12 per cent to just over €1 billion while ebitda before exception items increase by 69 per cent to €1.01 billion.

The group’s improved performance in 2011 was driven by its Latin American business, which delivered an ebitda growth of 19 per cent and a margin of 18.4 per cent for the full year.

While Colombia and Venezuela performed well in 2011, earnings in Mexico and Argentina were somewhat weaker, the group said.

The company, which suspended dividend payments in 2009, is recommending a final dividend of 15 cent per share for 2011, currently representing an annualised yield of over 3 per cent.

Smurfit said that in the last 12 months, strong cash flow generation delivered net debt reduction of €358 million to €2.75 billion, exceeding its stated net debt reduction target.

Revenues in the fourth quarter were up 4 per cent from the same quarter in 2010 to €1.8 billion. Pre-tax profits rose by over 50 per cent to €77 million over the same period.

Since the IPO in 2007, the group’s net debt has reduced by approximately €800 million, Smurfit said.

The group also said today it was looking for the consent of its lenders to change its senior credit facility agreement, so that the debt will not have to be repaid until 2016 and 2017.

"The proposed amendments to our senior credit facility form part of an ongoing process of efficient capital structure management, and will provide us with an extended debt maturity profile and significantly enhanced financial flexibility,” said chief financial officer Ian Curley.