In its results on continuing operations for the six-month period ended 31 October 2024, the London-headquartered packaging firm saw its adjusted operating profit drop by 39% to £221m, or down 38% by constant currency conditions.
Pre-tax profit was down by 89% to £29m, and also down 89% by constant currency conditions.
Revenue fell by 4% to £3.37bn, or down 2% under constant currency conditions.
The business experienced like-for-like box volume growth of 2% in H1, and said its lower adjusted profit was driven by the expected lower packaging prices.
It said higher input costs, notably fibre and paper, were broadly offset by cost reduction and productivity initiatives.
Group chief executive Miles Roberts said: "We have delivered a solid performance, with profitability in line with our expectations, despite a continued challenging market environment.
“We have maintained our relentless focus on customer service, product quality and innovation, together with significant cost and productivity initiatives, to mitigate the impact of a softer than expected overall market.
“Looking forward, whilst recognising the recent paper price weakness, we continue to expect modest growth in packaging volumes and increasing sequential prices to recover higher input costs.
On the International Paper deal, Roberts added: “We announced in April a recommended offer from International Paper to create a truly international sustainable packaging solutions leader that is well positioned in attractive and growing markets across Europe and North America and I am delighted that both DS Smith and International Paper shareholders overwhelmingly voted in favour of the transaction.
“We are working extensively with International Paper and expect completion in the first quarter of 2025. Our planning for the integration of our businesses is progressing well, and we remain excited about the opportunities for customers, employees and shareholders.” The board also announced an interim dividend for this year of 6.2p per share, a slight increase from the level from last year.
The business said the market trends experienced during the second quarter of the current financial year have continued into the start of the second half.
It continued to expect ongoing modest volume growth and packaging prices to improve sequentially through the year to recover higher input costs, while recognising the recent paper price weakness.
DS Smith’s share price was down by 1.54% on yesterday’s close at the time of writing at lunchtime today (5 December), at 568.10p (52-week high; 601.75p, low; 271.08p).
