Smurfit Kappa profit jumps 81 percent
In its first quarter results, Smurfit Kappa announced pre-tax profits of €104m jumping up from €57m in the same period last year, an 81 percent rise.
The company has also said it increased its efforts to find acquisitions and expects to post increased full-year profits, adding that it is boosted by a strong underlying performance from its operations in the Americas.
Gary McGann, Smurfit Kappa Group CEO, said: “In terms of the first quarter, earnings before tax growth of 12% and the sharply increased earnings per share year-on-year reflects a strong underlying performance in our Americas business, price improvements in our European packaging operations, and materially reduced financing costs as a result of the completion of the significantly more attractive financing structure for the Group, most of which has been completed in 2013.
“This was offset by a number of factors including downtime in our kraftliner operations at a net cost of approximately €8 million and a further €18 million adverse impact arising mainly from negative currency translation adjustment.”
European corrugated packaging demand remains reasonable with quarter-on-quarter growth in Western Europe partially offset by lower volumes in Eastern Europe. The first quarter was also impacted by weakening recovered paper costs and an inventory build-up from the year-end, resulting in recycled containerboard price decreases which slowed down corrugated price recovery.
SKG is taking approximately 25,000 tonnes of recycled containerboard downtime in the second quarter. Despite the current circumstances SKG’s integrated model has underpinned relatively good earnings development in the quarter.
Revenue €1.9 billion (up 2%)
Pre-tax profit: €104m (up 81%)
EBITDA before exceptional items: €269 million (up 12%)
Net debt €2.64 billion, down 8% from €2.87 billion
Cainiao Network Launches Customer-Centric Logistics
As the logistics division of the Alibaba Group, Cainiao Smart Logistics Network has decided to provide its Southeast Asian customers with unsurpassed service during its annual shopping festival. Based on customer feedback surveys, the company will expand its real-time customer service support and speed up delivery times. ‘By expanding and deepening our services, we aim to provide a stronger logistics infrastructure that can bolster the booming eCommerce sector, support merchants’ expansion into new markets and diversify retail options for consumers’, said Chris Fan, Head of Cross-Border, Singapore, Cainiao Network.
Who Is Cainiao?
According to TIME Magazine, Cainiao ‘is far from a typical logistics firm’. The company controls an open platform that allows it to collaborate with 3,000 logistics partners and 3 million couriers. This means that merchants can choose the least expensive and most efficient shipping options, based on Cainiao’s real-time logistics analytics. The company’s goal is to ship packages anywhere in the world in under 72 hours—and for less than US$3.00.
For countless small business owners around the world, from coffee-growers to textile-weavers, this could change everything. Usually, it costs about US$100 to ship a DHL envelope from Shanghai to London in five days. Cainiao aims to change that. Said its CEO Wan Lin: ‘The biggest barrier to globalisation is logistics’.
What’s Part of the Upgrade?
Throughout the Tmall festival, Cainiao’s logistics upgrade will be divided into four critical segments:
- Real-time customer service support. Cainiao has launched a direct WhatsApp channel for customers to receive logistics updates and ask questions.
- Expansion of air freight parcel size and weight limits. Packages can now be up to 30 kilograms or 1-metre x 1.6 meters to help ship large items such as furniture.
- Daily air and sea freight connections. Shipping frequency will almost double to seven times weekly to maintain resilience and efficiency.
- Compensation for lost or damaged packages. Customers will be reimbursed up to RMB 2,000 (US$311).
Where is the Company Headed?
From June 1st to June 20th, the finale of Tmall, Cainiao will ensure that its customers feel confident in the company’s ability to deliver their packages. Despite global shipping delays due to COVID, the show will go on. Said Fan: ‘This series of customer-centric logistics upgrades reaffirms our goal of pursuing value-added services to enhance customers’ shopping experience while mitigating challenges posed by external factors’.
Furthermore, Cainiao has recently expanded its Southeast Asian operations, achieving revenue growth of 68% year-over-year. In Malaysia, the logistics operation has partnered with BEST Inc. and Yunda; in Singapore, the company has partnered with Roadbull, Park & Parcel, and the Singapore Post. And if its recent measures help retain and grow its customer base, the company will be well-poised to lead the industry in resilient and customer-centric global logistics. ‘COVID-19 made everyone realise how important the logistics infrastructure backbone is’, said Wan. ‘And it gave us a peek at what Cainiao should look like in three years’.