There has been a shift in consumer focus from home improvements and deliveries to travel and experiences as lockdown restrictions are being lifted.
The leader of the paper packaging giant, speaking on CNN recently, revealed that their company experienced a significant surge in revenues during periods of lockdown.
“We have witnessed unprecedented growth in our business worldwide. However, this growth has reversed in recent times as people are now redirecting their spending towards travel and tourism rather than investing in their homes and durable goods,” the leader explained.
“People are now allocating their funds towards travel and accommodation, evident from the increased activity in airports and hotels,” he further stated.
Despite the easing of pandemic restrictions, the company reported that the first half of this year was the “second best first half” in its history.
In the first six months of this year, Smurfit Kappa recorded earnings of €1.11bn.
However, their earnings before interest, taxation, depreciation, and amortization (EBITDA) decreased by 5% compared to the same period last year.
Sales for Smurfit Kappa also saw a decline of 9% to €5.8bn in the same period, down from €6.39bn in the first half of 2022.
This reduction in revenues was attributed to a decrease in demand, with total volumes down 6% during the first half of the year.
Additionally, Mr. Smurfit highlighted that inflation was slowing down in certain markets, including parts of Europe, and expressed satisfaction with reports of decreasing inflation in the United States.
Headquartered in Dublin, Smurfit Kappa now employs over 48,000 individuals across 36 countries.
Mr. Smurfit also emphasized that there is still a demand for packaging, even in the face of ongoing interest rate hikes.
“The positive news is that appliances wear out, electronics wear out, durable goods wear out, and they need to be replaced,” he asserted.
Furthermore, Mr. Smurfit pointed out the global housing demand, which he believes will drive the need for packaging products in the coming years.
“There is a significant housing crisis in the United Kingdom and many other countries, necessitating the construction of more homes. This, in turn, increases the demand for durable goods and packaging,” he concluded.
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