By Dimitri Rhodes and Olivier Cherfan
(Reuters) -Dulux paint maker AkzoNobel slightly lowered its 2025 outlook on Wednesday amid persistently uncertain market conditions, and said it was planning further asset disposals after completing the sale of its Indian unit.
Dutch supplier of paints and coatings now sees adjusted core earnings (EBITDA) of around 1.48 billion euros ($1.73 billion) in 2025, having previously guided for a profit above that level. That also accounts for strengthening of the euro that has impacted the results this year, it said.
In terms of business momentum and exchange rates, the fourth quarter is expected to look like the third one, when AkzoNobel took a 30-million-euro hit from converting foreign currencies to euros, CEO Greg Poux-Guillaume told analysts.
The group also booked a 300-million-euro provision in the quarter from a court case related to an Australian project from 2013-2015. AkzoNobel reiterated its view that it was not liable and would defend the claims.
“Likely, the provision related to the Ichthys court case will be in focus today, with potential damages sought of 2.7 billion euros, far exceeding AkzoNobel’s insurance coverage of 500 million euros,” analysts from ING said in a research note.
Shares of AkzoNobel, whose quarterly results were broadly in line with market expectations, fell around 4% by 0840 GMT.
REPAINTING ASIA
In the latest portfolio move for the paint maker, Pakistan’s IGI Investments said on Wednesday it was in talks to buy up to 100% of AkzoNobel Pakistan.
“Wherever we don’t have a leadership position and we think the business would be more valuable to somebody else, we’d rather exit and recycle the capital towards our businesses where we have a winning hand,” Poux-Guillaume told Reuters, adding the company had begun to focus on its decorative paints businesses in Asia.
He also said the sale of AkzoNobel’s India decorative paints unit to JSW Paints for $1.6 billion, announced in June, was on track to close by December. It plans to use 500 million euros of the proceeds to reduce its debt in a push to cut costs.
In August, activist investor Cevian Capital took an around 3% stake in AkzoNobel, citing confidence in the group’s strategy of improving operating performance and sharpening its portfolio.
It has since raised the stake to 5% and is on track to reach 10% by Christmas if the average pace of investments remains unchanged, Poux-Guillaume said in the interview.
($1 = 0.8575 euros)
(Reporting by Dimitri Rhodes and Olivier Cherfan in Gdansk, editing by Milla Nissi-Prussak)
