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By Camille Raynaud and Alan Charlish
Feb 15 Core profit for Dutch paints maker Akzo
Nobel NV fell short of estimates in the last three
months of 2016 as the marine and energy sectors weighed, while
restructuring costs also put pressure on results.
The Dutch company, whose brands include Dulux paint,
confirmed its financial guidance for 2016-2018 and expects
improvements in Europe, Middle East and Africa, combined with
stabilisation in Latin America in 2017.
Shares in the company were down 3.6 percent at 0950 GMT in
Chief Executive Ton Buechner said that action was being
taken to tackle weaker parts of the business.
"At the beginning of the year we told everybody that the
marine and oil and gas activity was declining... We're acting on
these two segments which means that we are closing facilities,
we are adapting the work force on these segments," he told
reporters on a conference call.
The company reported fourth quarter operating income
excluding incidental items (EBIT) of 235 million euros ($248
million) on revenue of 3.46 billion euros. Analysts on average
had expected revenues of 3.50 billion euros and operating income
excluding one-off items at 252 million euros.
Morgan Stanley analysts said the earnings shortfall was
attributable to the company's performance coatings division,
which was affected by costs linked to restructuring support
functions and weakness in marine new build and oil and gas.
Morgan Stanley has an "Overweight" rating on the stock.
The company reported restructuring expenses of 62 million
euros for 2016 with more than half of it taken in the final
The company's results were also hurt by currency and rising
raw material costs.
Theodoor Gilissen Securities analyst Joost van Beek said
that the currency effects were due to weakness in the British
pound, Mexican Peso and the Indian Rupee.
"In some cases they are now confronted with rising input
prices because of the higher oil price...and probably they are
not able to pass these on sufficiently to the clients," he
added. Theodoor Gilissen has a "Recommended" rating for Akzo.
Buechner said the company was in discussions with suppliers
and was looking to optimise its production to tackle inflation,
and then will consider passing additional costs to customers.
($1 = 0.9471 euros)
(Reporting by Camille Raynaud and Alan Charlish in Gdynia;
Editing by Thyagaraju Adinarayan/Keith Weir)