Smurfit Westrock downgrades full-year profit guidance on freight costs

DUBLIN, July 29 (Reuters) - The world's biggest supplier of paper-based packaging, Smurfit Westrock SW.N, cut its full-year profit forecast on Wednesday due to significantly higher-than-expected freight costs that it sees continuing for the rest of the year.

• Smurfit cut its full-year adjusted core earnings (EBITDA) forecast to a range of $4.9 billion to $5.1 billion from $5 billion to $5.3 billion in April. It reported EBITDA of $4.93 billion last year.
• Increased freight costs driven largely by higher fuel costs and shipping rates due to the Middle East conflict and higher domestic transportation costs were the singular reason for the downgrade, Chief Financial Officer Ken Bowles told Reuters.
• Second-quarter adjusted EBITDA of $1.14 billion, down 6% year-on-year, reflected a $90 million hit from the higher freight costs. Bowles said that while other costs were in line with expectations, he expected freight to remain elevated for the rest of 2026.

• The Irish-based company said it fully expects to recover input cost inflation throughout the second half and that recently implemented price increases would also boost earnings over the next three quarters.
• Its restructured North American business continues to make "significant operational and commercial progress", and Bowles said he expected volumes in the company's main North America market to return to growth as soon as September and definitely through the final quarter.
• Smurfit Westrock laid out a plan earlier this year to grow its full-year core profit to $7 billion by 2030, primarily through boosting the U.S. business inherited in the 2024 $11-billion combination of Smurfit Kappa and WestRock.