Submitted by Fox First at Ten on October 18th
By TOBY STERLINGAP Business Writer
AMSTERDAM (AP) - With its new CEO on an extended sick leave, Dutch chemicals conglomerate Akzo Nobel NV reported Thursdsay a €2.37 billion ($3.11 billion) loss in the third quarter after taking a massive impairment charge on its home paints business.
The net loss compares with profit of €167 million in the same period a year ago though sales rose 5.7 percent to €4.28 billion. Akzo Nobel, the world's biggest maker of paints and industrial coatings by sales and the main supplier for Wal-Mart and Home Depot, said it would have made a profit if not for the write-down on what it refers to as its "decorative" paint arm.
Akzo Nobel said the business's growth potential is simply less than it had hoped, particularly in its biggest market, Europe.
CEO Ton Buechner took the top job April 23, only to go on a leave the company first disclosed in mid-September, due to a medical condition Akzo Nobel has described variously as "fatigue" and "exhaustion." In an update earlier this week, the company said Buechner won't be back until around the end of the year.
His duties have been assumed by CFO Keith Nichols and supervisory board member Antony Burgmans, a former chief executive of consumer goods giant Unilever.
The unusual situation has precipitated a sharp sell-off in the company's shares since September. They declined a further 3.8 percent to €42. 86 on Thursday.
Asked whether it was certain that Buechner will be able to return at all, Burgmans said he was "as confident as one can be based on the medical reports."
"No one of us can say with absolute confidence what will happen."
Akzo Nobel's motto is 'tomorrow's answers today.'
Burgmans said that Buechner's communications with the company are limited to occasional conversations with himself and another board member. A major strategic review of the company that Buechner was originally due to present this month probably won't be completed until the second quarter of 2013.
Asked whether the company has prepared an alternative plan in case Buechner doesn't return, Burgmans suggested it has.
"Look, the supervisory board is fully aware of its duties and responsibilities," he said. "We are fully aware what is needed, fully aware of what we should be doing."
Analyst Geert Steens of SNS Securities, who rates shares a Hold, said the financial results were in line with expectations.
He described the write-down on decorative paints business as an "accounting adjustment confirming the well-documented dire state of European affairs."
The company makes home paints under brands such as Dulux and Glidden. Its coatings arm makes paints used on cars, ships, and Samsung mobile phones, among other things.
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