By Padraic Halpin
DUBLIN (Reuters) -The world’s largest cardboard box maker Smurfit Westrock cut its full-year core profit forecast on Wednesday, as weak demand in North America forced it to implement additional downtime in factories there in the fourth quarter.
The Ireland-headquartered company now expects full-year adjusted core earnings (EBITDA) to rise by between 4% and 8.5% to between $4.9 billion and $5.1 billion, from a previous $5.0 to $5.2 billion range.
Its UK-listed shares were 4.9% lower by 1115 GMT.
“We’re just being prudent around how we see the world shaping up as we get to the end of 2025,” Chief Financial Officer Ken Bowles told Reuters, referring to the decision to reduce output, primarily in North America.
“The demand patterns (in the United States) that we talked about reversing during the year and hoping would come through still don’t seem to be there, particularly confectionery, foods, the retail sector, e-commerce.”
MORE LOSS-MAKING CONTRACTS TURNED PROFITABLE
Smurfit Westrock reported third-quarter core profit of $1.3 billion, in line with its guidance but below the average $1.32 billion forecast of nine analysts cited by LSEG SmartEstimate.
Bowles said falling U.S. interest rates should in theory give consumers some positivity, but Smurfit was not baking that into its numbers just yet.
Bowles added that the company had turned profitable between 65% and 70% of U.S. loss-making contracts inherited from its $11 billion 2024 acquisition of WestRock, up from 40% at the end of July.
He described a “slightly different” picture in its other main market of Europe, where demand is “bouncing around okay” and it was just a question of when it would improve, particularly in continued laggard Germany.
The EBITDA margin at its European-focused division improved to 14.8% from 13.4% at the end of June, but was still far below a rate of 19% achieved two years ago. The margin stood at 16.3% across all 40 countries in which it operates.
(Reporting by Padraic Halpin; Editing by David Holmes)
