AkzoNobel swings to a €2.4bn net loss as Dulux dogs the firm

 
City A.M. Reporter
DUTCH paintmaker AkzoNobel yesterday plunged to a quarterly net loss of €2.4bn (£1.95bn) after taking a €2.5bn writedown on its 2008 purchase of Dulux paint maker ICI.

The world’s biggest paint manufacturer is also looking for more cost cuts on top of the €500m of savings announced last year to cope with weak consumer and construction markets.

Revenues for the quarter rose six per cent on last year to €4.28bn, driven by currency movements and price rises, while volumes declined three per cent as cash-conscious Europeans put off redecorating.

Excluding the large writedown, AkzoNobel posted underlying earnings of €540m, up seven per cent on a year ago.

“The principal concern remains the decorative paint markets in Europe. The impairment taken in this quarter is a reflection of these concerns and our realistic assessment of the markets going forward,” said chief financial officer Keith Nichols.

Nichols is standing in for Ton Buechner, who took over as chief executive in April and has been on medical leave since September. Buechner, recovering from exhaustion, is expected to return to work around the end of the year, the firm said yesterday.

Nichols told analysts on a conference call that AkzoNobel’s dividend policy remained unchanged, countering some suggestions the payout might have to be cut.

Shares in the firm closed down 3.98 per cent at €42.78 yesterday.