DS Smith doesn’t deliver

Packaging firm DS Smith (LON:SMDS) said first-half pre-tax profit slumped 54% to £97m on revenue of £2.9bn, down 9% on the same period a year ago, with the firm reporting “a very difficult economic environment” due to the impact of Covid-19 over the period.

“The response of our customers has been significant; after an initial challenging start where many of our customers’ operations were either closed or disrupted due to Covid-19, sales volumes recovered strongly throughout the first half of this financial year in both Europe and the US,” said DS.

“Overall corrugated box volumes in May were 4.7% below May 2019 but recovered to growth of 3% in October resulting in the half year being 1.0% down on the corresponding period last year.

“As a consequence of the above, together with a deflationary pricing environment, overall profitability fell against last year.”

However, in a boon for shareholders, DS Smith said it has decided to resume the payment of dividends, declaring a 4p a share dividend for the first half. This helped its shares advance 9.5p to 368p (as at 10:50 GMT).