PPG posts lower Q2 net income, strong performance coatings sales

18 July 2013 14:41  [Source: ICIS news]

LONDON (ICIS)--PPG Industries reported on Thursday net income of $341m (€259m) for the second quarter of the year, a 6% drop from $362m generated during the same period in 2012, despite strong growth from its performance coatings business.

The coatings and specialties firm added that its second-quarter 2012 net income was $297m when adjusted to exclude income from discontinued operations. Second-quarter 2013 sales were $4.1bn, a 16% year-on-year increase.

CEO Charles Bunch said: “North America continued to expand, aided by higher industrial and auto production combined with continued positive momentum in the construction markets. Asia also grew, led by higher local consumption in China, while the European region remained sluggish with economic activity generally declining.

“Our sales volume results were also mixed, similar to the respective regional trends, but we delivered higher earnings in each major region,” he added.

Performance coatings sales were up 36% during the quarter to $1.69bn, driven primarily by the purchase of the North American decorative paints business the company acquired from Dutch rival AkzoNobel. The acquisition was completed in April.

The AkzoNobel unit also buoyed sales for the industrial coatings division, which posted a 13% increase in sales to $1.24bn.

“The acquired business had sales of about $475m in the quarter and delivered a mid-single-digit percentage earnings return on sales, which was slightly ahead of our target,” Bunch added.

Optical and specialty materials sales were up 4% to $326m, while sales for the architectural coatings and glass segments were down 5% and 1% respectively to $571m and $269m.

Bunch noted that the company was “optimistic” about its full-year results based on performance in 2013 so far.

PPG added that it has approved a $102m restructuring programme focused on better integrating the former AkzoNobel unit into the wider business. The charge will be recorded in the company’s third-quarter results.

($1 = €0.76)

By: Tom Brown
+44 208 652 3214

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