Akzo Nobel reports quarterly profit fall on material costs
Dutch-Swedish chemical and paint group Akzo Nobel reported a 1.8-percent drop in net profit for the second quarter on Thursday, blaming an increase in raw material costs.
Net profit was 268 million euros ($380 million), but this exceeded expectations by analysts questioned by the Dow Jones news wire, who had estimated a figure of 225.2 million euros.
But earnings before interest tax, depreciation and amortisation fell by 10.0 percent to 551 million euros.
Turnover for the period however was higher than in the same period last year, rising by 5.0 percent to 4.1 billion euros.
"The escalation of raw material costs, estimated to be around 20 percent higher year-on-year, has impacted performance for the second quarter," Akzo Nobel said in a press release.
Furthermore, there were several prolonged large site maintenance stops resulting in higher costs, it added.
"I am not satisfied with our performance in the quarter, despite positive volume and pricing developments," said the group's chief executive Hans Wijers.
"The recent months have been challenging and it does take time for price increases to work through," he added.
Akzo Nobel, which employs 55,000 people around the world, produces specialist paints and other chemical products used to make detergents, paper and asphalt.
© 2011 AFP