AkzoNobel profits down, blames rise in material costs
The world's largest paint maker, Dutch-Swedish group AkzoNobel, said Thursday its 2011 net profit slumped nearly 37 percent, hit by a 16 percent rise in commodity prices.
Net profit fell to 477 million euros (U$619 million) for 2011 but sales rose 7.0 percent to 15.7 billion euros, it said in a statement.
The Amsterdam-based group said it increased sales prices to offset the impact of rising raw material costs at one billion euros this year.
"For the year ahead we expect to see the benefit of the price rises that we have been able to achieve and which now have offset most of the raw material price increases," the group said.
It said costs were now steadier for its raw materials, used to make paints and chemicals such as Dulux and Sikkens and coatings for mobile phones aircraft, boats and washing machines.
AkzoNobel's medium-term strategy was to grow revenue to 20 billion euros and to be able to pay a "stable to rising" dividend to shareholders.
Medium-term plans were to increase earnings before interest, tax, depreciation and amortisation (EBITDA), with margins between 13 and 15 percent.
The company said it aimed to remain in the top three of the industry but warned that "major uncertainty remains in the economic environment."
"Our concerns are focused on the risk of recession in Europe, delayed recovery in the US property market and the potential for a slowdown in China," which it said could have a significant impact.
For the fourth quarter alone, AkzoNobel reported a net loss of 68 million euros, against a profit of 162 million euros for the same 2010 period.
It planned a shareholder dividend of 1.45 euros a share for 2011, the group said.
AkzoNobel is a a Global 500 company and employs 57,000 people around the world and has operations in more than 80 countries, it said.
© 2012 AFP