Akzo Nobel’s Q2 results hit by COVID lockdowns and weak demand
AMSTERDAM (Reuters) – Dutch paints and coatings maker Akzo Nobel said on Tuesday its operating income in the second quarter would be around 90 million euros ($94 million) lower than expected due to lockdowns in China and weak demand for decorative paints in Europe.
Lockdowns in China dented sales of paints and coatings in the second quarter, Akzo said, while the reopening of the country in June was not enough to recover all the missed revenue.
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Overall, this will lower operating income by around 40 million euros compared with the average expectation of analysts for the second quarter, a spokesperson said.
Results were also hit by relatively weak demand for decorative paints from European consumers in April and May, driving up inventory costs in Akzo’s supply chain.
Although demand returned to 2019 levels in June, operating income for the decorative paints business will be down by around 50 million euros compared with previous expectations, Akzo said.
The most recent poll published on Akzo’s website showed analysts on average expected operating income to drop 12% in the second quarter to 337 million euros, down from 384 million euros a year before.
($1 = 0.9582 euros)
(Reporting by Bart Meijer, Editing by Louise Heavens)