Akzo Nobel yearly profits better than hoped

3 February 2004

AMSTERDAM — Dutch pharmaceutical and chemical concern Akzo Nobel booked better profit than expected in 2003, reporting net profit of EUR 811 million, a decline of 9 percent compared against 2002.

Company chief executive Hans Wijers said at the end of last year the chemicals firm expected a 20 percent decline in profit and analysts had expected its profit to fall by between EUR 719 million and EUR 760 million.

Akzo Nobel reported on Tuesday that turnover declined from EUR 14 billion to EUR 13 billion and its trading result was EUR 1.3 billion, compared with EUR 1.5 billion in 2002, news agency nu.nl reported.

Wijers was pleased with the company’s results. “It was a year full of challenges, but we have more than fulfilled our promises,” he said.

Despite the positive year-end result, net profit in the fourth quarter rose by 3 percent to EUR 105 million, much lower than most analysts had expected. Bloomberg-polled analysts had expected a quarterly profit of about EUR 200 million, including exceptional posts.

If exceptional posts were excluded, the profit comes out at EUR 268 million, 52 percent more than the EUR 176 million result recorded in the fourth quarter of 2004. The result is higher than expected.

The company’s medicines division was particularly pressured last year, recording a EUR 45 million fall in its US profits from anti-depressant Remerol. Elsewhere across the globe, the drug’s financial performed was better.

US pharmaceutical giant Pfizer delivered Akzo Nobel a considerable financial positive, earning the Dutch company EUR 88 million from the co-operative development and sale of a drug combating schizophrenia. Other benefits were also reported.

The paint and varnish division substantially profited from restructuring as 1,890 workers were made redundant. The division’s operating result declined, however, by 7 percent to EUR 431 million due to the strength of the euro and high pension costs.

Cost cutting also assisted Akzo Nobel’s chemicals division, as an estimated 1,000 people lost their jobs. The division’s operating result declined by 6 percent to EUR 324 million.

Subject: Dutch news