By Scott Kanowsky
Investing.com -- Shares of Akzo Nobel NV (AS:AKZO) fell on Tuesday, after the Dutch paint-maker warned that operating income will likely be €90M lower than expected in the second quarter, citing the impact of lockdowns in China and sluggish demand in Europe.
Despite recent reopenings, strict COVID restrictions in China weighed, in particular, on the company's paints and coatings business, Akzo Nobel said. The company added that this will, in turn, lead to a loss of approximately €40M in operating income in Q2 compared to estimates coming into the period.
Meanwhile, quarterly operating income at Akzo Nobel's decorative paints division is also now forecast to fall by about €50M versus previous expectations due to weak sales in Europe.
“The current business environment is complex and constantly evolving,” said Akzo Nobel CEO Thierry Vanlancker in a statement. “Given the macro-economic uncertainties, we’re accelerating adjustments in our cost base for H2, as well as our working capital optimization[.]"
Akzo Nobel added that market volatility has also had a "material impact" on its second quarter earnings, but reiterated its target of achieving €2B in adjusted pre-tax income in 2023.
The company will announce its second quarter results on July 20.