Akzo Nobel Q2 Net Rises Despite Lower Revenues; Warns On Full-year Profit

(RTTNews) - Dutch paint maker Akzo Nobel NV (AKZOY, AKZOY.PK) Thursday reported a higher net profit for its second quarter helped by recognition of a deferred tax asset and profit on divestment of Decorative Paints in North America. Quarterly revenues, however, declined 4 percent, reflecting mainly divestments and adverse currency impacts amid continued challenging market conditions.

The company stated that its full-year operating income is unlikely to exceed the 908 million euros reported in 2012, as it expects to increase restructuring charges in the second half by 120 million euros to about 325 million euros, to achieve its 2015 targets. In Amsterdam, the shares are currently down about 6 percent.

Akzo Nobel said its performance improvement program is on track to be completed in 2013, that will deliver 500 million euros in EBITDA benefit a year early.

CEO Ton Büchner said, "Conditions remain tough and, as we have previously indicated, we do not expect an early improvement in the external trends our businesses are facing. With this pressure on our top line, we are stepping up our restructuring activities to secure the delivery of our 2015 targets which drive cash generation and quality of earnings."

In the second quarter, net income attributable to shareholders increased to 429 million euros from 219 million euros last year. Earnings per share from total operations climbed to 1.77 euros from 0.92 euros per share reported a year ago.

Earnings from continuing operations were 1.27 euros, up from 0.90 euros last year. On an adjusted basis, earnings per share were 1.37 euros, while it was 1.06 euros per share a year ago.

Profit before tax was 295 million euros, lower than 326 million euros in the prior year.

Akzo Nobel said its operating income fell 17 percent to 322 million euros, driven by adverse price/mix developments.

Revenues for the quarter declined 4 percent to 3.87 billion euros. The company attributed the fall to divestments and adverse currencies against a backdrop of continued challenging market conditions.

Revenues from Decorative Paints and Performance Coatings declined 1 percent each. Revenue in the Group's Specialty Chemicals segment fell 12 percent due to divestment of Chemicals Pakistan and lower overall volumes.

It was last month when AkzoNobel said it planned to divest its decorative paints stores for professionals in Germany to independent wholesale distributors.

In Amsterdam, Akzo Nobel shares are currently trading at 44.61 euros, down 2.7 euros or 5.7 percent.