AkzoNobel’s first-quarter net profit fell by 29% year on year as sales volumes dipped 7% due to continued supply constraints, with negative impact from the Russia-Ukraine war and COVID-19 restrictions in China, said Reuters.
The company pegged the Q1 impact of the Russia-Ukraine war on operating income at about EUR5m, “of which €1m relates to impairment of accounts receivable and inventories in the region”, the Dutch paints and coatings major said in the notes accompanying its financial results. Sales for the three months to March 2022 posted a double-digit increase, thanks to a 17% spike in product prices.
“Pricing initiatives more than offset the increase of raw material and other variable costs (including freight), which combined increased EUR334 million compared with Q1 2021,” AkzoNobel said in a statement.
“Although uncertainties remain with regard to amongst others the sanctions on Russia, the COVID-19 resurgence in China and continued supply constraints – especially in North America – we remain confident in realizing our Grow & Deliver strategy,” AkzoNobel CEO Thierry Vanlancker said.
Raw material and other cost inflation (including freight) is expected "to gradually ease during the second half of 2022" and "aims to continue to offset raw material and other variable cost inflation (including freight) through pricing initiatives", the company said.
The Dutch producer is targeting a EUR2bn adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) target for 2023. Russia and Ukraine have a combined share of about 2% to AkzoNobel’s revenue prior to the start of the conflict in late February, it said.
We remind, AkzoNobel expects that its revenues from Russia will drop around 70% from the EUR210m generated in the country last year in 2022, the CEO of the Netherlands-headquartered paints and coatings player said on Thursday.
The company has suspended the bulk of its business in the country in the wake of the Russia-Ukraine war and ensuing EU sanctions. What remains of its operations in the country will be locally operated, according to AkzoNobel chief Thierry Vanlancker.
AkzoNobel expects that its revenues from Russia will drop around 70% from the €210m generated in the country last year in 2022. The company has suspended the bulk of its business in the country in the wake of the Russia-Ukraine war and ensuing EU sanctions. What remains of its operations in the country will be locally operated, according to AkzoNobel chief Thierry Vanlancker.
Also, AkzoNobel has launched a new GBP 10 M global research and development (R&D) facility at its site in Slough, UK. The new centre will house 120 specialists and will serve as a major facility within the firm's global R&D network and help to further advance its innovation capabilities, specifically in the decorative paints area. The UK project is the newest in a series of facilities launched by the company intended to advance its product development.
mrchub.com