AMSTERDAM, the Netherlands - Paint and coating manufacturer Akzo Nobel N.V. (AkzoNobel) posted a net profit in the third quarter despite a five-percent dip in revenues due to adverse currency effects and divestments. Third-quarter revenues were €3,778 million, five percent lower compared with the same period last year. Lower restructuring costs and higher volumes helped push the company’s third-quarter operating income up 22 percent to €303 million.

The third quarter saw AkzoNobel divest its Building Adhesives business (completed October 1) and announce plans to drive further efficiency and performance improvements within Functional Chemicals and in Germany, as well as plans to streamline the management structure in Decorative Paints to improve competitiveness. The company also published details of investments totaling more than €50 million in two new manufacturing facilities to meet growing demand in western China.

Decorative Paints revenues of €1,136 million in the third quarter were stable versus the previous year, with higher volumes offset by adverse currency effects. Although conditions in Europe remained challenging in general, global volumes were up from the same quarter last year. Lower costs and lower restructuring charges contributed to increased operating income of €107 million for the third quarter, more than double the previous year's figure.

Quarterly revenue at Performance Coatings declined four percent to €1,415 million compared with last year, with the decline attributable to adverse currency effects. While overall volumes were up two percent, weak demand in Europe continued to impact all businesses. Third-quarter restructuring costs were lower in 2013 than a year earlier, resulting in improved operating income, up 23 percent at €160 million.

Revenue in Specialty Chemicals was 10 percent lower at €1,252 million, primarily as a result of the divestment of Chemicals Pakistan and negative currency effects. Overall volumes were flat compared with a year earlier. Operating income was down 20 percent at €107 million, mainly a consequence of one-off restructuring costs incurred as part of the performance improvement program in the Functional Chemicals business unit.

The company’s performance improvement program announced in October 2011 is on track to deliver the full €500 million in EBITDA at the end of this year, a year early. Further efficiency and cost-reduction measures have also been identified as restructuring activities are stepped up, the benefits of which will be realized in 2014 and beyond. As previously indicated, the majority of the restructuring charges for the second half of 2013 will be taken in the fourth quarter. Year-to-date, AkzoNobel has charged €144 million of an expected full-year total of around €300 million restructuring costs, with €75 million in the third quarter.

The economic environment remains challenging, and AkzoNobel does not expect an early improvement in the trends faced in its end-user market segments. The company expects restructuring charges in the fourth quarter of around €160 million. This means that full-year operating income before incidental items is unlikely to exceed €908 million.