AkzoNobel vows action to boost flagging profit

DUTCH chemicals group AkzoNobel promised new, unspecified measures to improve its earnings as it reported a 10 per cent drop in second-quarter core profit, hurt by rising costs and weak demand.

The world’s biggest paints company was hit by faster-than-expected increases in prices of raw materials such as pigments and oil-related resins and solvents.

It has struggled to offset this through product price rises due to weak demand in European and US construction markets. The group said raw material costs have risen 20 per cent year on year, higher than its forecast for a 15 per cent rise.

It reported quarterly earnings before interest, tax, depreciation and amortisation (EBITDA) before one-offs of €551m (£486m), down from €614m a year ago having warned last month that profits would fall.

“I am not satisfied with our performance in the quarter, despite positive volume and pricing developments. Recent months have been challenging and it does take time for price increases to work through,” outgoing chief executive Hans Wijers said in a statement.