DS Smith scraps divi but sees strong retail demand
Packaging maker DS Smith scrapped its interim dividend but reported strong demand from its consumer goods unit as panic buying swamped supermarkets due to the Covid-19 crisis.
The company added that executive bonuses had been axed to conserve cash as it said it would be “inevitably” be impacted by any prolonged downturn.
“In terms of demand, corrugated box volumes have continued to be good and we have seen improvement on the first half on a like for like basis, with our focus on the fast moving consumer goods customer base, in particular, benefiting us during these uncertain times,” the company said on Wednesday.
Supplies into the grocery sector had been “very busy” particularly in the ambient food, drinks, hygiene, frozen food and dry packaged grocery categories, as frenzied shoppers cleared supermarket shelves.
DS Smith said trading had been hit in southern Europe as government lockdowns were imposed in Italy, France and Spain.
The northern region including Germany, Benelux, UK and Scandinavia had seen less impact while Eastern Europe had not seen any meaningful effect to date, it added.
The company said last month it had been working with food retailers across Europe to design and produce new boxes to supply emergency provisions during the pandemic including medical supplies such as masks and ventilators.