Smurfit Kappa Group PLC on Thursday said integrations plans with WestRock were ‘progressing well’ as it unveiled a drop in first quarter sales and earnings which nonetheless topped market expectations.

Shares in Smurfit Kappa rose 4.2% to 3,620.70 pence each in London on Thursday. It was second best performing stock in the FTSE 100 which was up 0.3%.

The Dublin-based packaging maker said revenue in the first quarter fell10% to €2.7 billion from €3.00 billion a year prior.

Earnings before interest, tax, depreciation and amortisation fell 16% to €487 million from €579 million and the Ebitda margin declined to 18.0% from 19.3%.

Analysts at Jefferies said Ebitda was 12% ahead of its €433 million forecast.

Chief Executive Tony Smurfit called it ‘a very strong first quarter,’ reflecting the ‘continuing benefits of our multi-year capital plans.’

He noted box demand has ‘continued to improve’ with volume growth in Europe and the Americas of around 3% and 2% respectively.

Smurfit said integration planning with WestRock is ‘progressing well and as expected. We remain on-track to complete the transaction in early July.’

He said the combination with WestRock would create a ‘global leader in innovative and sustainable packaging with a very exciting future for all stakeholders.’

Back in September, Smurfit Kappa agreed to merge with Atlanta, Georgia-based WestRock to form Smurfit Westrock. This new ‘global leader in sustainable packaging’ will be headquartered in Dublin but will have its primary listing in New York.

For each WestRock share, WestRock shareholders will receive one Smurfit WestRock share and $5.00 in cash, while each Smurfit shareholder will receive one Smurfit Westrock share for each share in Smurfit.

Smurfit shareholders will own around 50.4% of the new company, while WestRock shareholders will hold the remaining 49.6%.

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