# Dulux maker Akzo Nobel lifts outlook on easing raw material costs Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-07-25 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Akzo Nobel lifts outlook on easing raw material costs Meta Description: Dutch paints and coatings maker Akzo Nobel raises annual profit outlook on lower raw material costs. Expect slight improvement in second half. URL: https://financedigest.com/dulux-maker-akzo-nobel-lifts-outlook-on-easing-raw-material-costshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-07-25t054115z1lynxmpej6o04rrtroptp4akzo-nobel-results-1736813723427-compressed.jpg) # Dulux maker Akzo Nobel lifts outlook on easing raw material costs By Matteo Allievi (Reuters) -Dutch paints and coatings maker Akzo Nobel raised its annual profit outlook on Tuesday, supported by declining raw material costs and resilient demand. “We expect the second half of the year to be slightly better than the first one, but not significantly better,” CEO Grégoire Poux-Guillaume told Reuters. Poux-Guillaume said volumes were [rising in anything linked to automotive](https://www.financedigest.com/automotive-condenser-market-to-witness-rise-in-revenues-during-the-period-2020-2030.html "Automotive Condenser Market to Witness Rise in Revenues During the Period 2020 – 2030"), marine and air space, while the building and construction sectors were suffering more. The maker of Dulux and Flexa paints raised its 2023 outlook for adjusted core earnings (EBITDA) to 1.4-1.55 [billion euros](https://www.financedigest.com/axa-unilever-to-join-new-1-billion-euro-regenerative-agriculture-fund.html "AXA, Unilever to join new 1 billion euro regenerative agriculture fund") ($1.55-$1.72 billion, with a midpoint slightly above analysts’ consensus forecast of 1.44 billion. The [shares were up 2.4% at 76 euros](https://www.financedigest.com/asia-shares-subdued-yen-shunned-as-euro-shines.html "Asia shares subdued, yen shunned as euro shines") as of 1110 GMT. Akzo said it saw the first benefits of easing raw material costs in the [second quarter](https://www.financedigest.com/dollar-pares-gains-as-us-growth-contracts-for-second-quarter.html "Dollar pares gains as US growth contracts for second quarter"). We saw raw materials starting to turn especially in the Coatings business, while in Decorative Paints they were still up,” [Chief](https://www.financedigest.com/boohoo-says-exposure-to-sterling-plunge-is-limited-finance-chief.html "Boohoo says exposure to sterling plunge is limited – finance chief") Financial Officer Maarten de Vries said on a media call. Paint makers passed on steep raw material [costs to customers last year through price](https://www.financedigest.com/naturgys-profit-rises-on-lng-gains-soothing-shareholders-by-pietro-lombardi-madrid-reuters-spanish-power-utility-naturgy-reported-on-monday-an-88-jump-in-profit-for-the-first-six-months-of.html "Naturgy’s profit rises on LNG gains, soothing shareholders By Pietro Lombardi MADRID (Reuters) – Spanish power utility Naturgy reported on Monday an 88% jump in profit for the first six months of the year, boosted by strong earnings at its liquefied natural gas (LNG) business, which could help it to win over restive investors. Earlier this month, the company said it would increase its dividend floor through 2025 while trimming expected investment, as it sought to make rewarding shareholders a priority. Pleasing them has become a focus as Naturgy considers changes that could reshape the company and after arguments over the potential appointment of a chief executive. Naturgy’s first-half net profit jumped to 1.05 billion euros (.16 billion), boosted by its liquefied natural gas (LNG) business. Shares were down 0.2% in mid-morning trading, bucking deeper declines, in particular for Spain’s blue-chip banks and utilities after a general election on Sunday produced no clear winner. Renta 4 Banco analyst Angel Perez Llamazares said Naturgy performed better than expected, adding “cash flows also beat our expectation,” and debt fell more than expected. After natural gas prices hit record levels last year, Naturgy said a fall in procurement costs this year and hedging gains had boosed profits. In the first half of the year, the company “exceeded the objectives of operating efficiency, cash generation, investment materialisation and debt reduction,” Executive Chairman and CEO Francisco Reynes said. After rival Iberdrola named a separate CEO last year, Naturgy is the only large energy company in Spain to combine the roles of executive chairman and CEO. Earlier this month, the company raised the dividend floor to 1.40 euros a share, from 1.20 euros. Operating profit (earnings before interest, tax, depreciation and amortisation) is expected to reach 5.1 billion euros, compared with a previous guidance of 4.8 billion euros. It said it was targeting net profit of 1.8 billion euros in 2025. Naturgy also relaunched its plan to split regulated infrastructure operations and liberalised energy businesses into two listed companies. The project had been suspended after the Ukraine war disrupted energy markets and analysts are still sceptical. “We believe it is unlikely that Naturgy will be able to implement its asset split in the short term and it is also unlikely that a big change in the shareholding of the company would occur,” said RBC analyst Fernando Garcia. ( = 0.8986 euros) (Reporting by Pietro Lombardi, editing by Inti Landauro and Barbara Lewis)") increases. Akzo’s prices in the second quarter were up 5% from a year earlier, to offset wage and [energy cost](https://www.financedigest.com/factbox-europes-efforts-to-shield-households-from-soaring-energy-costs.html "Factbox-Europe’s efforts to shield households from soaring energy costs") inflation, it said. Its adjusted EBITDA rose 18% to 397 [million euros](https://www.financedigest.com/spains-king-felipe-reveals-2-6-million-euros-in-wealth-in-bid-to-make-royal-house-more-transparent.html "Spain’s King Felipe reveals 2.6 million euros in wealth in bid to make Royal House more transparent") in the quarter, slightly below the 403 million expected by analysts. Akzo, which has warned of [volume weakness due](https://www.financedigest.com/dsm-misses-q1-forecasts-due-to-weak-volumes-and-high-costs.html "DSM misses Q1 forecasts due to weak volumes and high costs") to the uncertain economic situation, said volumes were better than expected in the first half, declining by 2%. Asked about destocking trends, de Vries said in an interview that customers’ inventories were now roughly in line with [pre-pandemic levels](https://www.financedigest.com/marstons-says-q4-sales-above-pre-pandemic-levels.html "Marston’s says Q4 sales above pre-pandemic levels"). The only [market where they were taking longer to normalise was China](https://www.financedigest.com/world-shares-rally-as-china-offers-markets-a-hand.html "World shares rally as China offers markets a hand"), where the economic rebound had lost steam, the CEO and CFO said. “It’s not picking up as quickly as we would like but the recovery is on the way and it is getting in the right direction,” Poux-Guillaume added. Akzo [forecast low](https://www.financedigest.com/jj-pulls-covid-vaccine-sales-forecast-due-to-low-demand-supply-glut.html "J&J pulls COVID vaccine sales forecast due to low demand, supply glut") single-digit percentage volume growth in the second half due to easier year-ago comparisons, resulting in volumes in line with last year’s. ($1 = 0.9032 euros) (Reporting by Matteo Allievi in Gdansk; editing by Milla Nissi, Jason Neely and Sharon Singleton) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---