DS Smith profits up 80% despite rising recyclate costs

Miles Roberts DS Smith
Miles Roberts, chief executive, DS Smith

Paper and cardboard packaging group DS Smith has reported a profit increase of 80% in its first half results for the financial year 2021/22.

This was despite rising raw material costs from higher prices for recovered fibre.


Profits before tax rose to £175 million from £97 million in the first half of financial year 2020/21. This profit was based on revenue increasing 16% to £3.362 billion.

The company said in its results statement that raw material, energy and transportation input costs had all risen significantly over the comparative period. However, these were mitigated by effective supplier arrangements, long term hedging positions and rising packaging selling prices.

DS Smith group chief executive Miles Roberts said: “We are continuing to benefit from a very dynamic market with demand for packaging for different retail solutions evolving rapidly and COP26 intensifying the desire for sustainable packaging solutions for the circular economy.

“Our leadership in these areas has contributed to record volumes with particularly strong growth in the US and Southern Europe regions, where we have invested recently, as well as with our multi-national FMCG customers.

“In a challenging operating environment, I am pleased to see good progress. Our supply chains have remained secure and the significant increases in input costs have been mitigated by effective hedging of energy cost, our long term supplier agreements and raising packaging prices.

“Combined with strong volume growth this has significantly increased our profit with continuing good progress recovering from the impacts of Covid19. Strong cash generation has returned our financial leverage to within our medium-term target. We have built a business to benefit from the significant structural growth drivers within fibre based corrugated packaging.

“These benefits, combined with our scale, geographic footprint, sustainability and innovation focus, position us very well for continued volume and market share growth. Together with pricing momentum, this underpins our confidence to deliver a significant improvement in profitability during the second half of this year in line with our expectations and towards our medium-term targets.”

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