Akzo Nobel reports Q2 profit miss hit by China lockdowns, weaker Europe
2022.07.20 08:58
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FILE PHOTO: AkzoNobel’s logo is seen in Amsterdam, Netherlands, February 16, 2012. REUTERS/Robin van Lonkhuijsen/United Photos
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(Reuters) -Dutch paints and coatings maker Akzo Nobel (OTC:AKZOY) reported on Wednesday weaker-than-expected quarterly core earnings, citing new coronavirus restrictions in China and slowing demand for decorative paints in Europe.
The Amsterdam-based firm’s adjusted operating income fell by 26% to 249 million euros ($255 million) in the quarter, below analysts’ 261-million-euro average estimate in a Vara Research poll.
“Our Q2 results were clearly impacted by two months of lockdowns in China and destocking in decorative paint do-it-yourself channels in Europe,” Chief Executive Officer Thierry Vanlancker said in a statement, adding the demand got back on track in June.
The Dulux paint maker is among many companies facing supply chain and inflation headaches worsened by China’s fresh efforts to stop the spread of COVID-19.
Akzo Nobel had last month warned its quarterly operating income would take a hit of around 90 million euros from the lockdowns in China and weak European demand for decorative paints.
Sales improved by 14% to 2.85 billion euros from a year earlier, beating analysts’ forecast of 2.73 billion euros.
The group said raw material and other variable costs increased by 321 million euros in the quarter, compared with the same period last year.
($1 = 0.9765 euros)
