AkzoNobel reported a €1.52 billion ($1.93 billion) loss for the fourth quarter, due mostly to writedowns on the value of Imperial Chemical Industries (ICI), which it bought last year and was hit hard by the global economic downturn. The loss compares to a €56 million profit in the fourth quarter a year earlier. Operating profit fell 21% to €219 million, while sales were down 2.7% to €3.56 billion. The net loss was caused by a €1.3 billion charge against the value of ICI, which it acquired for €11.5 billion last year, and another €200 million charge to integrate the company and cut jobs.
In September, Akzo said it would cut 3,500 jobs by 2011, representing approximately 12% of its work force. So far it has carried out 1,660 of those cuts.
Akzo’s decorative paint business, which sells paint for the home and features brands such as Dulux, Glidden, Flexa and Sikkens, showed a 41% decline in operating profit to €41 million, with a 13% fall in sales in Europe, its largest market.
“In the fourth quarter we experienced a slowdown in many previously fast-growing emerging markets,” the company said in a statement. In the U.S. it said both professional and DIY sales volumes were down “significantly” again.
AkzoNobel said that operating profits fell 19% to €89 million at its performance coatings division, which makes industrial paints used on cars, ships, planes and construction.