By Stephanie Hamel
(Reuters) -Akzo Nobel reported a 42% rise in fourth-quarter core profit on Wednesday but missed forecasts hurt by due to hyperinflation in Turkey and Argentina, and a subpar decorative segment performance.
The Dutch paints and coatings maker posted adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of 313 million euros ($337 million), missing the 319 million expected by analysts in a company-provided consensus.
Hyperinflation in Argentina and Turkey had a negative 23 million-euro impact on operating income during the fourth quarter, Akzo said.
Akzo posted 986 million euros in revenue in its Decorative Paints segment, below the 1 billion euros expected by analysts.
While Decorative paints volumes in Europe remain below 2019 levels, Poux-Guillaume said the market had bottomed out in mid-2023 and rebounded in the fourth quarter in "an improvement that will carry into next year".
Prices overall were 4% higher in the period compared to a year earlier, even as the company started rolling back some increases in its more mature markets, CEO Greg Poux-Guillaume said.
ING analysts said the company's performance in Decorative Paints were buoyed by higher volumes in all regions, pricing and its acquisition of the Huarun business but offset by currency effects.
Akzo signalled in October that price rises had come to an end in most of its markets as costs started to ease.
On Red Sea shipping disruptions, CFO Marteen de Vries said in a call with Reuters that longer supply lines and increasing costs could impact the company, which sources its raw materials from China.
Poux-Guillaume added that carriers' delays were now around 10 to 12 days. "For us it's a working capital impact, but it's manageable," he said.
For 2024, the company expects an adjusted EBITDA of between 1.50 billion and 1.65 billion euros, while analysts had forecast a core profit of 1.59 billion euros for the year.
Shares in Akzo Nobel were down 0.98% at 1149 GMT.
($1 = 0.9287 euros)