DS Smith PLC (LON:SMDS) announced it is building two packaging plants in undisclosed, “fast growth” regions to supply the e-commerce sector.

The FTSE 100-listed group, Europe’s largest recycler of paper and cardboard, expressed confidence in trading based on strong demand driving paper price up and customer wins in Europe and the US.

READ: DS Smith says box volumes have recovered but not prices

The firm declared an interim dividend of 4p per share although half-year profit before tax tanked 54% to £97mln.

Revenue in the six months to October 31 shed 9% to £2.8bn, with volumes down 1%, although in November volumes rose 5%.

Trading weakened in the first quarter particularly, as customers deemed non-essential took a hit, but rebounded in the second quarter as economies restarted.

Net debt at period-end stood at £2bn from £2.1bn in April.

Analysts at Peel Hunt said the results were “very solid and on track” but were surprised by the choice of dividend.

“The company said at the pre-close that it would return to the dividend list, but this compares to the 5.4p interim dividend announced a year ago that was ultimately withdrawn,” they noted.

Shares advanced 4% to 371.3p on Thursday at the opening bell.

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