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Updated Tuesday, June 28, 2011 11:11 pm TWN, AP

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Paintmaker Akzo Nobel NV warns of weak Q2 amid commodity inflation

AMSTERDAM, Akzo Nobel NV, the world's largest maker of paint, warned Monday that second-quarter earnings will be hurt by commodity price increases, weak business in some regions and maintenance delays at some plants.

The company forecast second quarter operating earnings before depreciation and amortization of goodwill, or EBITDA, of 550 million euros (US$777 million) in the second quarter, down from 614 million euros in the same period a year earlier.

In addition, the company said it expected the same measure to be flat for the year as a whole “assuming no further deterioration.” That's down on its prediction made in April, when it forecast a 5-percent increase.

Akzo's shares dropped 7 percent to 42.515 euros in early trading in Amsterdam.

Akzo Nobel is due to report second-quarter earnings July 21.

A key reason behind the warning was a 20 percent increase in raw material prices.

Outgoing chief executive Hans Wijers said the company is taking “actions to mitigate raw material price inflation, (including) companywide cost-containment actions.”

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