Painting blues: AkzoNobel posts fading 2017 profit

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Dutch chemical giant AkzoNobel Thursday sketched a sombre picture of 2017 earnings, saying net profits fell amid "industry headwinds" following a turbulent year for the world's leading paint maker.

AkzoNobel spent much of the last 12 months fighting a surprise takeover bid by its US rival, the Pittsburgh-based PPG. It also lost its long-time chief executive Ton Buchner, who quit in July due to health reasons.

In a battle which reached the Dutch courts, AkzoNobel rejected three takeover offers from PPG which would have valued the Dutch company at 26.9 billion euros ($32.4 billion).

The hostile move was led by US activist investor group Elliott Advisors, which finally agreed to bury the hatchet in August after losing one court case.

In response and eager to soothe jittery investors, the Amsterdam-based maker of such household paints as Dulux and Trimetal announced it would spin off its speciality chemicals business.

On Thursday it revealed that 2017 sales were up 3.0 percent on the previous year to 14.6 billion euros ($18.09 billion). But profits dipped 14 percent to 832 million euros compared to 970 million euros in 2016.

AkzoNobel blamed the shortfall on unfavourable currency rates, the increasing cost of materials and adverse market conditions.

"We are taking various measures amongst which cost control to deal with industry-wide headwinds, including higher raw material costs and challenges for the marine and protective coatings business," said new CEO Thierry Vanlancker.

He revealed that moves to spin-off the chemicals arm to create two "focused, high-performing businesses" had been completed internally, and the full separation "remains on track for April 2018".

In November, the company announced that merger talks with another US company, Axalta, had been ditched, after the two failed to reach an agreement.

Formed in 1994 from the merger of the Dutch and Swedish firms Akzo and Nobel, AkzoNobel has a 45,000-strong workforce and operates in about 80 countries around the world.

© 2018 AFP

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