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Half-year adjusted operating profit 221 mln pounds

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DS Smith ( DITHF ) reiterates IP deal completion in Q1 of 2025

(Adds company comments, analyst estimates)

Dec 5 (Reuters) - Britain's DS Smith ( DITHF ) said on

Thursday packaging demand and paper pricing were "not as strong

as expected" in its second quarter and these trends had

continued, as it reported a 39% slump in half-year profit, in

line with analyst expectations.

However the company, which has agreed to a $7.20 billion

all-share takeover by U.S. rival International Paper ( IP ),

forecast continued modest growth in packaging volumes and said

it would raise prices to offset higher input costs.

Paper and packaging firms are consolidating as the sector

slowly recovers from a drop in demand as customers reduced

stocks following a boom in packaging sales during the pandemic.

London-listed DS Smith ( DITHF ), which provides packaging, paper and

recycling services to companies including Amazon ( AMZN ) and

Unilever ( UL ), noted weak packaging prices and higher input

costs, notably for fibre and paper, during the first half of its

financial year to the end of October.

The company posted adjusted operating profit from continuing

operations of 221 million pounds ($281 million).

For the full year, analysts have been expecting an operating

profit of 574 million pounds, which would be an 18% fall from a

year earlier.

DS Smith ( DITHF ) reiterated the IP deal was expected to close in the

first quarter of 2025, making Thursday's update potentially the

last standalone results for the FTSE 100 firm.

Founded in the 1940s as a box-making business in east

London, DS Smith ( DITHF ) operates in more than 30 countries, serving

consumer goods, e-commerce and industrial sectors.

($1 = 0.7859 pounds)