(Refocuses head and lead and adds details, CEO quotes and share price)

 

--Akzo Nobel posted adjusted earnings for the fourth quarter slightly ahead of expectations, driven by price increases and cost savings

--The Dutch company said net profit was boosted by the sale of its specialty-chemicals business and confirmed it will start a share buyback and pay a special dividend later this month

 
   By Adria Calatayud 
 

Akzo Nobel NV's (AKZA.AE) fourth-quarter adjusted earnings topped forecasts thanks to price increases and cost-savings programs, as the sale of its specialty-chemicals business boosted net profit.

The Amsterdam-based paint maker said Wednesday that adjusted operating profit--excluding special items--rose 1.7% to 181 million euros ($204.5 million) in the quarter to Dec. 31 from EUR178 million in the year-earlier period. This was ahead of expectations of EUR177.9 million, according to a consensus estimate provided by the company.

Including noncash pension costs and other special items, however, operating profit fell 51% in the fourth quarter to EUR68 million, Akzo said. This was below analysts' forecasts of EUR102.1 million, according to a consensus estimate compiled by the company.

Net profit for the quarter was EUR5.85 billion compared with EUR75 million in the year-earlier period, the company said. This included a EUR5.8 billion boost from the specialty-chemicals sale, said the company, which houses the Dulux, Polycell and Cuprinol brands.

Akzo Chief Executive Thierry Vanlancker said 2018 was a landmark year for the company, which saw it split off its specialty-chemicals unit and sell the business--now called Nouryon--to U.S. private-equity giant Carlyle Group LP and Singapore's GIC Private Ltd. in a EUR10.1 billion deal. The disposal followed a takeover bid by U.S. rival PPG Industries Inc. (PPG) in 2017, which was fended off by the Dutch company.

The company said it will pay a special dividend of EUR4.50 a share, or EUR1.0 billion in total, on Feb. 25, and will also start a share buyback of up to EUR2.5 billion around the same date, with the aim of closing it by the end of the year. Akzo has already paid a special dividend of EUR1.0 billion and completed a capital repayment and share consolidation of EUR2.0 billion as part of its plans to distribute EUR6.5 billion to shareholders after the takeover attempt and sale of the specialty-chemicals division.

"Akzo Nobel is now a focused paints and coatings company and we are channeling all our experience, energy and passion into being recognized as the reference in our industry," Mr. Vanlancker said in a call with analysts.

In the fourth quarter, the company's revenue increased to EUR2.31 billion from EUR2.28 billion, it said. Analysts had forecast Akzo to generate revenue from continuing operations of EUR2.21 billion, according to a company-provided consensus.

Higher prices helped Akzo offset a 7% decline in fourth-quarter volumes, mainly driven by China, and raw-material costs, the company said.

Akzo said it has cost-cutting programs in place targeting EUR200 million in savings by 2020 to address current challenges, as it expects raw-material inflation to continue during the first half of 2019, although at a lower rate than last year.

Shares at 1136 GMT traded up 4.4% at EUR77.95.

 

Write to Adria Calatayud at adria.calatayudvaello@dowjones.com

 

(END) Dow Jones Newswires

February 13, 2019 07:21 ET (12:21 GMT)

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