Paint giant AkzoNobel reports profit drop
Dutch-Swedish paint manufacturer AkzoNobel has let go workers, and implemented a salary freeze.
THE HAGUE—AkzoNobel, the world's largest paint maker, reported Tuesday a 38 percent drop in net profit on fourth quarter continuing operations and announced "deeper and faster" restructuring.
Revenue dipped three percent to 3.56 billion euros (4.5 billion dollars) on the back of a 10 percent drop in sales volumes, the Dutch-Swedish chemicals company said in a statement, blaming declining demand due to the global economic downturn.
"The harsh trading conditions experienced towards the end of the fourth quarter have continued into 2009 and, as a result, we expect this year to be very challenging," chief executive Hans Wijers said.
"Nevertheless, we remain focused on achieving our medium-term target of EBITDA (earnings before interest, tax, depreciation and amortisation) margin of 14 percent by the end of 2011" compared to 12.2 percent in 2008.
AkzoNobel would also pursue "rigorous cost management," said Wijers.
The company, which employs some 60,000 people around the world and makes products like Dulux paint, said net profit on continuing operations dropped from 196 million euros in the fourth quarter of 2007 to 121 million in the same period last year.
Measured after incidentals, the figure declined even further to a net loss of 1.5 billion euros from a gain of 56 million in the fourth quarter of 2007.
For 2008 as a whole, AkzoNobel reported a net loss of 1.1 billion euros.
The company had announced in September that it would would cut 3,500 jobs by 2011.
By year-end 2008, said the statement, AkzoNobel already had 1,660 fewer employees and had imposed a 2009 salary freeze on the management board and more than 500 executives.
The company said it would not complete a share buyback program in view of the "unprecedented uncertainties across the world."