(Reuters) -Britain's DS Smith on Thursday posted a 39% slump in half-year profit, in line with the market view, hit by weak packaging prices, and forecast modest growth in packaging volumes and price hikes to recover higher input costs.

Paper and packaging firms globally are witnessing increasing consolidation at a time when the sector is slowly recovering from a decline in demand due to customer destocking following a boom in packaging sales during the pandemic.

London-listed DS Smith, which provides packaging, paper and recycling services to companies including Amazon and Unilever, said the group experienced higher input costs, notably fibre and paper.

The company, which has agreed to a $7.20 billion all-share takeover by U.S. rival International Paper, posted adjusted operating profit from continuing operations for the six months to Oct. 31 of 221 million pounds ($281.2 million), in line with a company-compiled average analysts' estimates.

DS Smith reiterated that the IP deal was expected to be completed in the first quarter of 2025, making Thursday's half-year financials potentially the last standalone results for the FTSE 100 firm.

($1 = 0.7859 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich)