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Investing.com — Akzo Nobel NV (AS:AKZO) has warned that it expects to post a decline in third quarter earnings, citing the effect of macroeconomic headwinds on consumer confidence.
In a statement, the paints and coatings group said adjusted operating income during the three-month period is now seen in the range of €195M to €215M, down from €241M during the corresponding timeframe last year. The estimate excludes the impact of hyperinflation in Turkey, it added.
Raw material costs will be at their highest level since the start of the recent spike in inflation that began in early 2021, the company flagged, although price increases will partially offset these pressures.
Meanwhile, customers and channel partners are moving to destock in Europe and China, Akzo Nobel said. The Dulux brand owner previously missed income estimates in the second quarter due to slipping demand in Europe and COVID-19 lockdowns in China weighing on supply chains.
However, Akzo Nobel noted that the supply of raw materials is normalizing, while these expenses are also beginning to broadly ease. The firm said it expects to address the uptick in costs with “ongoing” price hikes throughout the rest of the year.
