AkzoNobel Posts 61% Gain in Q2
The divestment of a Paper Chemicals business unit and favorable currency rates have delivered positive results for coatings giant AkzoNobel for the second quarter.
The Amsterdam-based company posted a 61 percent gain in net income attributable to shareholders, to reach €331 million ($362 million USD), AkzoNobel announced Tuesday (July 21).
Operating income increased 38 percent to €486 million ($532 million USD), due to efficiency programs, lower costs, reduced restructuring expenses, divestment results and favorable currency rates, the company said.
Revenue grew 6 percent to €3.9 billion ($4.2 billion USD), mainly driven by favorable currency effects.
“We continue to deliver on our aim to improve the performance of our company,” said CEO Ton Büchner. “The second quarter continued to show the positive impact of our focus on profitability and leadership in sustainability.”
AkzoNobel CEO Ton Büchner said the company remains on target to hit full 2015 goals.
The company reported the following segment results.
The company’s Decorative Paints segment recorded a 6 percent increase in revenue and a 25 percent gain in operating income.
Growth in the segment was mainly attributed to a new operating model, lower costs, reduced restructuring expenses, strict cost containment and favorable currency developments.
Volumes grew in Asia, but were down for Europe and Latin America.
AkzoNobel reported an 8 percent increase in revenue in its Performance Coatings segment. Operating income in the segment increased 24 percent.
Favorable currency rates and higher demand for premium products helped deliver those results, according to the company.
Favorable currency rates and higher demand for premium products helped deliver an 8 percent revenue increase in the company's Performance Coatings segment.
Volumes dipped in the segment due to lower capital and maintenance spending in the global oil and gas industry. Russia, Brazil and China remained challenging markets during the quarter, the company said.
The company’s Specialty Chemicals segment saw a 5 percent gain in revenue due to favorable currency effects, partly offset by the impact of the divested Paper Chemicals business. Operating income increased 55 percent.
Volumes were flat in the segment.
In May, the company completed it sale of the Paper Chemicals business for €153 million ($167 million USD). Paper Chemicals was a part of AkzoNobel's Pulp and Performance Chemicals unit. Paper Chemicals was sold to Netherlands-based Kemira, a global chemicals company with a focus on pulp and paper, oil and gas, mining and water treatment.
“The divestment of Paper Chemicals was completed in line with the strategy of pruning the portfolio,” according to AkzoNobel.
Büchner said the global economy remains challenging, painting a mixed picture in terms of regions and customer segments.
The company said it remains on track to deliver its 2015 targets. Overall targets for the full year are 9 percent return on sales and 14 percent return on investment.