The Dutch owners of the Dulux paint brand posted their first annual loss in eight years following a €1.2bn writedown on British paint group ICI, acquired last year.
In the 2008 report and results for Q4, released this morning, Akzo Nobel reported taking a non-cash impairment charge of €1.2bn after tax ‘covering the value of ICI intangibles’.
The report said: “In light of current market conditions and the continuing lack of visibility regarding future global demand, the company has assessed the fair value of its assets against lower growth rates, which it now expects.”
Akzo Nobel acquired ICI, whose brands include Dulux, Cuprinol and Polycell, for €9bn in January 2008.
Decorative paint sales were down 6% in the fourth quarter of 2008, 3% for the year as a whole. Performance coatings saw a 4% rise in the fourth quarter, while speciality chemicals grew 5%.
Akzo Nobel ceo Hans Wijers expects this year to be ‘very challenging’ but said that that the fundamentals of the company ‘remain sound’.
“Our fourth quarter results reflect the impact of the economic climate im many of our businesses. The fact that we have implemented a significant level of restructuring is a clear indicator that action is being taken across the company to mitigate the effects of the global crisis.”
After announcing in September plans to cut 3,500 jobs by 2011 as a cost saving exercise, Akzo has already shed around 1,660 staff from its decorative paints business.