Smurfit Westrock to close US and German facilities

DUBLIN - Smurfit Westrock plc (NYSE: SW, LSE: SWR), a global leader in paper-based packaging with annual revenue of $21.11 billion, announced the permanent closure of its coated recycled board (CRB) mill in St. Paul, Minnesota, and a halt in production at its containerboard mill in Forney, Texas. The company clarified that the specialty coating facility in Forney will remain operational. These closures will result in a reduction of the company’s capacity by over 500,000 tons. According to InvestingPro data, the company currently trades at a P/E ratio of 50, suggesting premium market valuation relative to industry peers.

The decision will affect approximately 650 employees in the United States and Germany. Smurfit Westrock has also begun consultations to close two converting facilities in Germany. The company has committed to supporting the affected employees through career transition assistance, relocation opportunities where feasible, and severance packages aligned with local policies and agreements.

Tony Smurfit, President & CEO, expressed that the closures, while difficult, are based on realistic assessments of capacity needs, operating costs, and the company’s goal to enhance its business operations. He acknowledged the significant contributions of the employees at these facilities and assured that the company would support them throughout the transition.

The press release also contained forward-looking statements regarding anticipated expense reductions, charges, and cost savings related to the closures and headcount reductions. However, it also highlighted the risks associated with such forward-looking statements, including market conditions, competition, geopolitical uncertainty, and the ability to achieve planned closures and cost savings.

Smurfit Westrock, formed from the merger of Smurfit Kappa and WestRock, is one of the world’s premier providers of paper-based packaging solutions, employing around 100,000 people across 40 countries. The company maintains a solid financial position with an EBITDA of $2.84 billion and a current ratio of 1.37, earning a FAIR overall financial health score from InvestingPro’s comprehensive assessment system.

The information in this article is based on a press release statement from Smurfit Westrock plc.

In other recent news, Smurfit Westrock plc reported fourth-quarter earnings and revenue that did not meet analyst expectations. The company posted adjusted earnings per share of $0.28, significantly below the consensus estimate of $0.65. Revenue for the quarter was $7.54 billion, falling short of the anticipated $7.77 billion. Despite these misses, the company’s revenue showed a substantial year-over-year increase, rising from $2.86 billion in the same quarter last year, largely due to its merger with WestRock Company completed in July 2024. Smurfit Westrock reported a net income of $146 million for the quarter, with an adjusted EBITDA of $1.17 billion, reflecting a margin of 15.5%. For the full year 2024, the company achieved combined adjusted EBITDA of $4.71 billion, aligning with its guidance. Looking forward, Smurfit Westrock anticipates adjusted EBITDA of approximately $1.25 billion for the first quarter of 2025, assuming current market conditions persist. Additionally, the company announced a quarterly dividend of $0.4308 per ordinary share, marking a 42% increase.

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