Financial News

AkzoNobel reports dip in Q2 profits as costs rise

August 15, 2011

AkzoNobel reported that rising commodity costs, weak consumer demand, maintenance stops at its chemicals factories, and a strong euro combined to reduce second quarter earnings by 1.8 percent from a year ago. Net profit was €268 million ($381 million), down from €273 million in the same period a year earlier, even though revenues rose 4.9 percent to €4.10 billion on the back of volume increases. The company said raw material costs spiked by 20 percent from a year ago. AkzoNobel, which is Wal-Mart’s paint supplier, and owns the Dulux brand among dozens of others, also repeated the outlook it gave in a June profit warning, that full year profits would be flat “assuming no further deterioration” in its business.

“I am not satisfied with our performance in the quarter, despite positive volume and pricing developments,” chief executive Hans Wijers said. “The recent months have been challenging and it does take time for price increases to work through.”

Wijers retires next year and is due to be replaced by 45-year-old Ton Buchner,  previously CEO of Swiss industrial conglomerate Sulzer AG.