Smurfit Westrock, one of the largest global cardboard box manufacturers, has indicated potential impacts on U.S. consumer spending if proposed 25% tariffs on Mexican goods are enacted. CEO Tony Smurfit addressed this following a decline in the company's shares after underwhelming fourth-quarter earnings.
Earlier, the U.S. government postponed the 25% tariff on Canadian and Mexican goods until March. Smurfit Westrock, operating extensive facilities in these regions post-merger between Smurfit Kappa and WestRock, is evaluating the situation closely.
The company, though operating in 40 countries, supplies packaging to Mexican clients exporting food products like fruits and vegetables to the U.S. Smurfit remarked, "Tariffs are passed on to consumers," questioning the willingness of American consumers to pay 25% more for items such as avocados and oranges.
Smurfit also highlighted that potential tariffs on Canadian exports could necessitate a reassessment of operations at its Canadian mill, which exports paper to the U.S., as competitiveness could be affected.
For the full year, Smurfit Westrock reported a core profit of $4.7 billion, aligning with expectations. However, Q4 2024 EBITDA was $1.166 billion, falling short of the $1.258 billion projected by six analysts from LSEG SmartEstimate. Post-announcement, U.S.-listed shares decreased by 5.6% as of 1510 GMT.
The company forecasts first-quarter core profits of $1.25 billion and noted that the year has "started well."
Source: Reuters