The Dutch company said quarterly organic sales fell 11% in Asia largely due to competitive pricing in China.
AMSTERDAM: AkzoNobel has missed expectations for third quarter sales and core profit, hit by weak consumer demand and lower pricing in China, and as the Dulux paints maker continued to implement its cost-cutting plan.
“Our business in China is doing really well on the industrial side and it is doing pretty badly on the consumer side,” finance chief Maarten de Vries said during a press call.
The Dutch company, which sells decorative paints to consumers and professionals and specialised coatings used by many industries, said quarterly organic sales fell 11% in Asia largely due to competitive pricing in China.
AkzoNobel has been focused on cutting costs as the wider industry faces a patchy recovery from a post-pandemic slowdown when raw material costs rose and the decorative do-it-yourself market sought to reduce inventory.
“We’ve seen in the in the first and second quarter quite an impact specifically from wage inflation in our costs,” de Vries said.
He added the costs had come down sequentially in the in the third quarter.
Akzo’s operating income dropped 27% in the quarter, hit by higher operating and restructuring related costs, it said in a statement.
Its third-quarter revenue fell 3% from a year earlier to €2.67bil (US$2.88bil), below the €2.76bil expected by analysts in a company-provided consensus.
Adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) dropped 4.8% to €394mil, missing expectations of €404mil.
The Amsterdam-listed group said it expected its adjusted Ebitda to reach €1.5bil this year, at the bottom of its earlier forecast range and in line with analysts’ full-year expectations. — Reuters
