US-based paints and coatings producer PPG reported on Wednesday a decline in Q3 net income because costs rose faster than sales, said the company.
The following table shows the company's Q3 financial performance. Figures are in millions of dollars. Sales rose in part because of a 12% year-on-year rise in selling prices. Volumes fell by 3%, because of weaker demand in Europe. Also, demand in China has recovered less than expected from the country's COVID lockdowns.
Unfavourable exchange rates made up a 6% hit to sales. The wind down of PPG's Russian operations made up a 1% hit. The company's automotive refinish business and its PPG Comex business in Mexico reported record sales.
Sales volumes rose by double digits for the company's businesses for aerospace and automotive original equipment manufacturers (OEM). Despite the increase, demand in both industries remains well below pre-pandemic levels.
The company's automotive refinish and aerospace coatings businesses continued to have order backlogs that are much larger than normal, totalling USD200m. A few raw materials remain tight, but overall availability continued to improve.
For logistics, truck availability and port congestion continued to improve. Labour availability showed modest improvement. China introduced new COVID lockdown restrictions.
We remind, PPG will invest USD11 million to double the production capacity of its powder coatings plant in San Juan del Rio, Mexico. The expansion project is expected to be completed by mid-2023 and will allow the plant to meet the expected future demand for powder coatings in Mexico.
PPG is a leading supplier of powder coatings to the automotive, transportation, appliance, furniture and other markets. The company expanded the business with its 2020 acquisition of Alpha Coating Technologies, which manufactures powder coatings for light industrial applications and heat-sensitive substrates, and its 2021 acquisition of Worwag, which makes liquid, powder and film coatings for industrial and automotive applications. PPG recently agreed to acquire the powder coatings business of Arsonsisi, including a manufacturing plant in Verbania, Italy.
mrchub.com