AMSTERDAM (Reuters) – Dutch paints and coatings maker Akzo Nobel on Wednesday reported a big jump in first-quarter profits but warned the full impact of the global coronavirus pandemic was still to come.
The maker of Dulux paints said cost savings had helped its adjusted operating income up 31% in the January-March period, to 214 million euros ($232.1 million).
Sales fell 6% to 2.06 billion euros as the coronavirus pandemic hit demand in Asia, where sales of decorative paints dropped more than a quarter as shops closed down.
Akzo said activities in Asia and particularly China showed “initial signs of recovery” in March, but warned for a much larger hit to sales in the second quarter as economic lockdowns have spread across the globe.
“The impact on sales in the second quarter will be significantly larger than in the first quarter”, Chief Financial Officer Maarten de Vries told reporters.
Akzo last month already dropped its outlook for 2020, warning of a steep fall in demand in the months to come.
Chief Executive Thierry Vanlancker said he held out hopes for a recovery of decorative paints sales in the second half of the year, as quarantine measures have fed an appetite for home improvement among consumers around the world.
A deep economic crisis, however, could hurt demand for industrial coatings in the longer term, he warned.
(Reporting by Bart Meijer; Editing by Muralikumar Anantharaman and Carmel Crimmins)