RESULTS: Jefferson Smurfit chairman Dr Michael Smurfit has sounded an upbeat note about future trading and indicated that price increases for its containerboard products are likely.

In a comment on current trading with Smurfit's first-quarter results, Dr Smurfit said: "Business conditions and sentiment have clearly improved in Europe, the general industry environment is supportive of price restoration for containerboard which would effectively offset higher input costs."

But shareholders hoping for an update on the approach by Chicago private equity house Madison Dearborn have been disappointed, with not a mention of the approach in the nine-page statement.

Smurfit cancelled a conference call with investors yesterday because of the approach from Madison Dearborn.

There is still no announcement on the appointment of a committee of non-executive directors who would examine any bid that may emerge from the Madison Dearborn approach. Senior Smurfit management, including Dr Smurfit, other members of his family and senior executives, including chief executive Mr Gary McGann, are thought to be in discussions with Madison Dearborn about involvement in a leveraged buyout.

While the market generally welcomed results in line with forecasts and the optimistic comments on current trading, Smurfit shares did not break out of their current narrow trading range. Smurfit shares have risen almost 20 per cent since the company disclosed that it had received an approach which could lead to a bid, and it is takeover speculation, not current trading, that is driving the share price.

The key first-quarter indicator for Smurfit is earnings per share and the 2.7 cents in the first quarter - while down 31 per cent on first quarter 2001 - was broadly in line with market forecasts. At the pretax level, profits fell 27 per cent to €60 million, reflecting the decline in profits at American associate SSCC, a 26 per cent fall in operating profits in the European operations, some price weakness and a six-day strike at the group's main mill in France.

Sales in Europe were down 9 per cent to €721 million with operating profits tumbling 26 per cent to €$56 million.

In Latin America, there was a better performance with operating profits down 7 per cent to €23 million, while sales fell 5 per cent to €197 million. In North America, sales, which does not take into account the interest in SSCC, fell 2 per cent to €164 million while operating profits, including the 29 per cent share of SSCC profits, were 48 per cent lower on €25 million. SSCC itself reported a sharp fall in the first quarter, with pretax profits falling from $46 million to $14 million.