UpdateAkzoNobel’s performance coatings helps narrow Q4 net loss

20 February 2013 10:51  [Source: ICIS news]

(adds further financial detail throughout)

AkzoNobel headquartersLONDON (ICIS)--AkzoNobel reduced its fourth-quarter net loss to €59m ($79m) from a loss of €68m in the same period a year earlier, partly buoyed by higher earnings at its performance coatings business, the Netherlands-headquartered chemicals major said on Wednesday.

The company’s sales were up by 3% year on year at €3.67bn in the October-December 2012 period, while earnings before interest, tax, depreciation and amortisation (EBITDA) also rose by 3% to €363m.

The group’s EBITDA margin remained stable year on year at 9.9%.

AkzoNobel's performance coatings business witnessed EBITDA rise 35% year on year to €190m in the fourth quarter of 2012, with the strongest growth coming from the industrial coatings and marine and protective coatings units.

The segment’s revenue increased to €1.39bn from €1.33bn in same period the year before, supported by currencies and the acquisition of Germany-based coatings manufacturer Schramm, the company said.

Fourth-quarter EBITDA in the group’s decorative paints business fell by 23% year on year to €47m as challenging market conditions continued in Europe and Latin America.

Revenue grew 3% to €995m, driven by positive volumes and favourable currencies, while volumes were up 2%, mainly reflecting China’s performance, AkzoNobel said.

The specialty chemicals business reported a 17% fall in EBITDA to €172m, as demand started to weaken in the second half of the year, particularly in Europe.

Revenue in the fourth quarter was 3% higher at €1.32bn, mainly due to favourable currencies. However, performance in the last quarter was unfavourably impacted by the general slowdown in demand (especially in Functional Chemicals) and production-related issues at the group’s customers.

For the full year of 2012, the company swung to a net loss of €2.17bn, compared with a net profit of €477m in 2011, weighed by an impairment charge of €2.11bn in the third quarter related to its decorative paints business.

Its sales were up by 5% year on year at €15.4bn in 2012, driven by favourable currencies and pricing offset by lower volumes. EBITDA for the year was 4% higher at €1.90bn.

"AkzoNobel delivered a strong set of results in difficult markets, underpinned by the performance improvement program which exceeded our intermediate targets," said CEO Ton Buchner.

Looking ahead, Buchner said: "The economic environment remains challenging and we expect no fundamental changes in the trends that we have seen recently in our businesses.

"We will continue to focus on performance improvements and operational efficiencies in order to benefit from our strong portfolio of businesses with many leading market positions and exposure to growth markets."

($1 = €0.75)

By: Franco Capaldo
+44 (0)20 8652 3214

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