© Reuters. FILE PHOTO: Cans of Dulux paint, an Akzo Nobel brand, are seen on the shelves of a hardware store near Manchester, Britain, April 24, 2017. REUTERS/Phil Noble/File Photo
(Reuters) – Dutch paints and coatings maker Akzo Nobel reported on Wednesday weaker-than-expected quarterly core earnings, hit by continued raw material inflation and supply chain disruptions, which it expects to continue through mid-2022.
The Amsterdam-based firm, which sells decorative paints and industrial coatings worldwide, said raw material and other variable costs in the third quarter increased by 278 million euros ($324 million) year-on-year.
Chemical makers such as AkzoNobel, Axalta Coating Systems, PPG Industries and Tikkurila have been hit by rising raw material costs due to strong demand and supply chain issues this year, as global economies try to scramble their way out of the coronavirus pandemic.
“During the third quarter, as predicted, extraordinary levels of raw material costs and supply disruptions impacted our business,” Chief Executive Officer Thierry Vanlancker said in a statement.
The Amsterdam-based firm reported third-quarter adjusted operating income of 241 million euros, missing analysts’ forecast of 243.8 million euros, while sales improved 6% to 2.41 billion euros, also slightly below the company-provided consensus of 2.44 billion euros.
The firm said it was still confident of achieving its 2 billion euros earnings before interest, taxes, depreciation, and amortization (EBITDA) target for 2023, and the annual 50 basis points increase in return on sales over the 2021-2023 period.
($1 = 0.8584 euros)
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