Gary McGann, the outgoing chief executive of paper and packaging group Smurfit Kappa, says the company will maintain its target of spending upwards of €300 million annually on acquisitions, as the market for its products continues to improve on both sides of the Atlantic.

“That’s the target we have set and we will stick with it,” said Mr McGann, who retires from his executive role next month.

Smurfit Kappa on Wednesday reported an operating profit of €348 million for the first half of the year, on the back of €3.9 billion in revenues.

The packaging company’s revenue for the half year grew by 1 per cent or €49 million from €3.94 billion in 2014 to €3.99 billion this year.

Operating profit before exceptional items for the half year was €348 million, compared to €363 million during the same period in 2014, a decrease of 4 per cent.

The company said tax payments in the first half of the year amounted to €64 million, €21 million higher than the previous year due to a combination of timing and higher profitability year-on-year.

Earnings before interest, taxes, depreciation, and amortisation (Ebitda) declined by 13 million to €551 million in the first half of the year, with a decrease in the Americas, partly offset by higher earnings in Europe.

Ebitda for the second quarter was down due to significantly lower earnings in Venezuela following the adoption of the Simadi exchange rate for the Bolivar.

Earnings per share amounted to 73.2 cent for the half year 2015, an increase of 17 per cent year on year.

Mr McGann said EPS growth of 38 per cent, was underpinned by good underlying business conditions, significantly reduced long-term funding costs and the earnings impact of capital investments.

He said European corrugated packaging volumes have remained strong, delivering volume growth of over 4 per cent in the first half of 2015.

The company announced an increase in the interim dividend to 20 cent, bringing the total payment in 2015 to 60 cent per share, an increase of 30 per cent year-on-year.

“The group is a significantly stronger business today than at any other time in its recent history…. We continue to expect to deliver earnings growth year on year and we remain focused on accelerating returns to shareholders,” Mr McGann said.

Smurfit Kappa’s net debt increased by €170 million during the quarter to €3.1 billion in June mainly as a result of the completion of over €160 million in acquisitions.

Barry Dixon, an analyst with Davy stockbrokers, said the company's strong European performance is likely to improve further due to impending price increases for some of its products, such as corrugated packaging.

The company’s management indicated the need to secure similar price increases in markets such as Mexico and Colombia to refelct improved demand and offset currency fluctuations.

“With an undemanding rating... Smurfit Kappa’s share price should move higher to reflect [its] more positive outlook,” said Mr Dixon.