DS Smith manufactures cardboard boxes
(Picture: AFP/Getty Images)DS Smith, which manufactures cardboard boxes and paper, is heading for a £400 million profit for the last six months after successfully offsetting the rising costs of energy and raw materials.
The company said that its revenue had been strong for the half year to 31 October 2022, which coupled with “effective cost mitigation” had improved its profitability.
Analysts had predicted that the company’s profits for the whole year would be around £692 million, but DS Smith now expects to exceed that thanks to continued demand from its products, driven by the ongoing boom in online shopping.
Because the packaging market is so strong, the company has been passing on much of its cost increases to clients and has avoided denting its own profits, despite slightly lower like-for-like corrugated box sales volumes.
Shares in DS Smith rose as much as 10% on Monday morning to 267p but remained more than 30% below its highest price of the year.
CEO Miles Roberts said he was pleased with the business’s momentum.
“We remain focussed on delivering for our customers and managing our costs in an inflationary environment,” he added.
