- Dulux maker shares gain as much as 3.5% to two-month high
- Performance stems from internal improvements, analyst says
Akzo Nobel NV raised its interim dividend to the highest in seven years as Europe’s biggest paint maker reported third-quarter profit that beat analysts’ estimates after extending cost cuts. The shares advanced to a two-month high.
The dividend was increased to 35 euro cents per share from 33 euro cents, the highest since 2008, Amsterdam-based maker of Dulux paint said in a statement on Thursday. Operating profit excluding some items rose 30 percent to 436 million euros ($493 million). Analysts surveyed by Bloomberg estimated 422 million euros.
“In an absolute sense it’s a really good result, despite volume growth staying behind on average,” Joost van Beek, analyst for Theodoor Gilissen Bankiers, said by phone. “It very much stems from internal improvements.”
The results are a boost for Chief Executive Officer Ton Buechner with one week to go before he updates investors on his plans for the company at a meeting in London. After years of merging plants, removing management layers and selling less-profitable businesses, profit is now close to his 2015 targets and the levels of competitors such as PPG Industries Inc.
The shares rose as much as 3.5 percent in Amsterdam, and traded 1.4 percent higher at 62.20 euros as of 9:56 a.m. local time. That’s the highest since Aug. 20, and values the company at 15.4 billion euros.
Revenue grew 2 percent to 3.76 billion euros, in line with estimates.
“Our financial results for the third quarter continue to demonstrate how Akzo Nobel is delivering improved performance in a challenging economic environment,” Chief Financial Officer Maelys Castella said during a conference call with journalists. Restructuring costs are expected to amount to about 100 million euros this year, she told investors during a separate call.
For the current quarter, Akzo Nobel expects the positive impact of currencies to ease, with trading in Russia, Brazil and China remaining challenging. North America is showing positive trends, yet there’s still no improvement in Europe. The company repeated that it’s on track to deliver on its full-year targets.