LONDON (ICIS)--AkzoNobel’s second-quarter adjusted operating income fell 22%, year on year, with headwinds strongest in April and easing through June, the Netherlands-based paints and coatings major said on Monday.
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- April was the worst of the crisis so far for the producer, with revenues dropping 30% that month, moderating to a 20% fall in May; June was firmer but still 5% below 2019 levels, according to preliminary second-quarter financials.
- European decorative paints demand bounced back quicker than company anticipated, and China sales were close to normal levels by the end of the quarter, although the environment in other regions continues to be variable.
- Performance coatings sales remained significantly weaker, particularly for automotive and aerospace markets.
- The firm has moved to compensate for lower end-market demand with temporary cost-savings measures, it said.
- Company sales were in line with market expectations, but adjusted earnings were significantly stronger than investors had expected, according to analysts at Baader Bank.
- “In our view, the reasons were faster and stronger than expected cost saving effects as well as a positive raw material cost effect on Akzo’s gross margins,” the bank said in an investor note.
- Moody’s singled out the paints and coatings sector as likely to be one of the more resilient in chemicals markets this year, as raw material price trends turn favourable for the industry after several years of headwinds.
AkzoNobel is due to publish full second-quarter financials on 22 July.
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