AkzoNobel Q3 profits miss expectations
ReutersDutch paints and chemicals company AkzoNobel NV's third-quarter core earnings narrowly missed analysts' estimates and the company said full-year operating income was unlikely to beat last year's level due to restructuring charges and weak markets.
October 22, 2013, 12:06 am TWN
The company said it expected to incur about 160 million euros in restructuring charges in the fourth quarter, making full-year operating income before incidental items unlikely to exceed 908 million euros (US$1.24 billion).
AkzoNobel, which owns the Dulux paint brand, reported third-quarter earnings before interest, tax depreciation and amortization (EBITDA) of 456 million euros on revenue of 3.78 billion euros.
Analysts in a poll commissioned by Reuters had expected EBITDA of 457 million euros and revenue of 3.76 billion euros.
AkzoNobel reiterated that its performance improvement program was on track to be completed in 2013, giving 500 million euros in EBITDA benefit at the end of the year, a year early. It said full-year restructuring charges were expected to be about 300 million euros.
AkzoNobel — which makes performance coatings for cars, aircraft and ships as well as specialty chemicals for the pulp and paper industry — said in July it would take additional restructuring charges to reflect deteriorating growth prospects in China, India and Brazil.
The company's results over the recent quarters have been hit by fragile consumer demand and weak housing markets in the United States and Europe, as well as high costs of raw materials such as titanium dioxide, a pigment used in paint.
In the past 18 months, it has taken a huge writedown on its purchase of Dulux paint maker ICI and sold its struggling North American decorative paints arm to U.S. rival PPG Industries for US$1.1 billion to focus on its larger European and fast-growing businesses and markets.
“The trading environment behind these results has not changed in that demand remains soft and on a comparative basis Q3 last year was particularly weak,” Chief Financial Officer, Keith Nichols, said in a statement.
AkzoNobel's shares closed at 48.42 euros on the Amsterdam stock exchange on Friday.