18 October 2012 11:21 [Source: ICIS news]
LONDON (ICIS)--AkzoNobel’s share price tumbled on Thursday after the Netherlands-headquartered coatings and specialty chemicals group reported it had swung to a net loss in the third quarter of 2012.
At 10:14 GMT, AkzoNobel’s shares were trading at €42.35 on Amsterdam's Euronext stock exchange, down 4.95% on the previous close.
Earlier on Thursday, AkzoNobel said it swung to a net loss of €2.38bn ($3.09bn) in the third quarter from a €149m net profit reported in the same period last year, weighed by a €2.5bn impairment charge on the firm’s decorative paints business.
The non-cash impairment charge came after AkzoNobel undertook what it called a prudent review, excluding restructuring effects, of its balance sheet, taking into account lower expected growth rates. In Europe, the company recognised an impairment charge of €1.9bn, in North America €400m and in South America €200m.
The company’s revenue rose by 6% year on year to €4.28bn in the third quarter, mainly because of favourable currency effects, although total volumes were down 3% year on year, primarily due to the economic slowdown in Europe.
Global analysts Bernstein Research said it maintains its "outperform" rating for AkzoNobel, with a target share price of €53.
“We believe AkzoNobel is more defensive than first appears with a great deal of upside potential. We expect pricing power from all three segments [Decorative Paints, Performance Coatings, Specialty Chemicals] with the potential for other positive developments (i.e. raw materials costs falling, restructuring, a lower pension liability, and a gradual housing recovery),” Bernstein Research added.
($1 = €0.76)
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections