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Akzo Nobel profits drop in Q3

Published: 3 November 2008
ICI integration wipes 23% off third quarter profits with ‘incidental’ and ‘one off charges’.
Akzo Nobel profits drop in Q3
Higher than anticipated costs as a result of the acquisition of ICI earlier this year, have taken Dutch chemical group Akzo's profits down to €157m from €203m in 2007.

These include 'other' costs of €72m and incidental charges of €79m, which have resulted in the reduced total net income for the third quarter.

The sale of ICI went through in January for £8bn, although Akzo Nobel has since announced around 3,500 job cuts to cope with 'deteriorating global economic conditions' and a drop in demand for its paint brands in the UK and US.

However, Akzo's Q3 report also revealed a 5% increase in revenue for decorative paints, with a revenue growth of 3% achieved in Europe despite a difficult UK market.

Akzo Nobel chief finance officer Keith Nichols said: "All three business areas achieved underlying growth. This is solid proof of the strong positions Akzo Nobel holds in diverse, highly attractive predominantly low-cyclical sectors with good growth potential.

"It is also evidence of management actions taken to date to improve operational performance and to deliver the synergies from the ICI acquisition."

But he did add: "At this stage, the potential severity of the economic cycle is unclear."

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