VINACHEM

LONDON (ICIS)--AkzoNobel swung to a net income of €162m ($219m) in the fourth quarter of 2010, compared with a loss of €60m in the same period a year earlier, on the back of higher demand, the Dutch paints and coatings company said on Thursday.

Revenue in the fourth quarter jumped 17% year on year to €3.62bn, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 3% to €377m, AkzoNobel said.

Revenue growth was driven by a 6% increase in sales volume across the firm’s business areas as demand recovered, particularly in high-growth markets, the company said.

“All business areas have reported strong revenue growth, increased profitability, improved sustainability performance and higher returns on invested capital,” said CEO Hans Wijers.

AkzoNobel’s decorative paints segment reported an 11% year-on-year increase in fourth quarter revenue to €1.14bn, primarily driven by a robust recovery in Asia and Latin America and a positive foreign currency translation effect.

The company said that its US business marked a key milestone in its turnaround strategy by securing a supply contract to be the primary paint supplier to more than 3,500 Walmart stores.

Double-digit revenue growth for decorative paints was achieved in Asia and Latin America, with lower sales volumes recorded in mature markets, Wijers added.

In its performance coatings business, fourth-quarter revenue rose by 22% to €1.24bn compared with the same period in 2009, as volume increases were seen in all businesses and all geographic regions, especially in eastern Europe, Latin America and Asia, AkzoNobel added.

Meanwhile, AkzoNobel said that a broad recovery in demand, combined with the success of its strategic growth platforms, had led to a volume increase across nearly all business lines in its specialty chemicals portfolio, with revenue during the fourth quarter of 2010 growing 19% year on year to €1.26bn.

For the full year of 2010, AkzoNobel’s net income surged to €754m from €285m in 2009, as sales rose 12% year on year to €14.6bn.

EBITDA in 2010 rose 16% year on year to €1.96bn.

“AkzoNobel's revenue in high growth markets, currently representing around 40% of our total, grew more than 20%, outperforming the market in 2010,” siad Wijers.

Broad demand improvement in both mature and high-growth markets for the firm’s specialty chemicals business unit led to a full-year EBITDA increase of 27% to €939m, he added.

“Performance coatings delivered a solid performance, supported by volume growth and selective acquisitions, although EBITDA margins were impacted by higher raw material costs,” Wijers said.

Looking ahead, AkzoNobel expected to make further progress on its medium-term strategic ambitions and said it would be aiming for more than 5% growth in revenue and EBITDA this year.

Wijers also announced that AkzoNobel was on track to increase its revenue to €20bln in five years, with a view to keeping its margins at a 13-15% range, first announced in September 2010. The CEO said the targets could be achieved through organic expansion and a continued focus on high-growth markets.