Travel to Europe after lockdowns and a resurgence of the coronavirus in China weighed on Akzo Nobel’s second-quarter earnings, the paint company said, dismissing higher prices as the reason for slowing demand.
Demand in China was hit by coronavirus restrictions, while sales in Europe were weaker due to a combination of “enthusiastic” inventory at the start of the quarter and a general reversal of do-it-yourself trends, Chief Executive Thierry Vanlancker said.
Akzo Nobel raised prices by 16% year-on-year to offset raw material costs and other variable costs such as freight, which rose by 321 million euros.
In the last six quarters, the paint company had to absorb cumulative inflation amounting to 1.4 billion euros, the CEO pointed out.
Akzo Nobel shares fell nearly 2 percent as it reported adjusted operating profit of 249 million euros versus analysts’ estimates of 261 million euros, while revenue improved 14 percent to 2.85 billion euros from a year ago.
Source: Capital
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