Smurfit Westrock Q3 adjusted EBITDA drops 7.4% on cost inflation

Paper-based packaging company Smurfit Westrock had third-quarter adjusted EBITDA of $1.21 billion, down 7.4% from $1.30 billion a year earlier, as unprecedented cost inflation and weaker-than-expected converting volumes weighed on the result.

Net sales increased to $8.16 billion from $8.00 billion. Net income fell to $219 million from $245 million, while the net income margin was 2.7%. Operating cash flow was $874 million, compared with $1.13 billion a year earlier.

The company implemented price increases across most paper grades and expects them to more than offset input costs as the increases pass through. It expects to absorb approximately $700 million of additional freight and energy costs in full-year 2026. The full benefits of the pricing actions are expected to be realized into 2027.

“For full year 2026, we now estimate our Adjusted EBITDA2 to be approximately $4.7 billion. This expected outcome primarily reflects the continued and unprecedented cost inflation we are experiencing,” said Tony Smurfit, President and CEO, in a statement. The adjusted EBITDA outlook was not reconciled with the comparable GAAP outlook because of uncertainty and potential variability in reconciling items.

North America generated $760 million of adjusted EBITDA, with a margin of 15.6%. The region remained sold out in all containerboard grades and most consumer grades, while its corrugated and consumer converting businesses improved. The company also reported progress in reducing loss makers and optimizing those businesses.

EMEA and APAC produced $379 million of adjusted EBITDA, with a margin of 13.4%, as rising energy costs affected the market. The region implemented containerboard price increases and was passing them on with the normal time lag. Latin America’s adjusted EBITDA reached $126 million, with its margin at 21.4%.

During the quarter, Smurfit Westrock announced an agreement to acquire CMPC’s containerboard assets in Chile. The company said the transaction would strengthen its leadership presence in Latin America as a pan-regional supplier.