Akzo Nobel (AKZOY) shares fell sharply in the opening hour of trading Wednesday after the Dutch chemicals dropped its second profit warning in as many months following a failed $30 billion takeover approach from PPG Industries (PPG) - Get Report earlier this year.
The maker of Dulux paints, which has been under pressure from activist investor Elliott Management Corp., said underlying earnings fell 13% to €383 million ($451 million) for the three months ending in September due "adverse foreign exchange, ongoing industry specific headwinds and supply chain disruptions". It also suffered from a temporary disruption to their manufacturing and supply chain, reporting a €25 million impact on earnings due to Hurricane Harvey and "other events".
"We have also initiated phase one of our transformation plan to create a fit for purpose Paints and Coatings organization which will deliver €110 million annual savings in 2018 contributing towards our 2020 financial guidance," CEO Thierry Vanlancker said in a statement.
Akzo shares were marked 1.75% lower in Amsterdam and were changing hands at €77 each by 10:00 am local time, extending a three-month loss of 1.22%.
The group now now expects Ebit for 2017 to be in line with 2016, "due to adverse foreign exchange, ongoing industry specific headwinds and supply chain disruptions, including the adverse impact of Hurricane Harvey in the US."
The company also said Wednesday that it would hold an extraordinary general meeting on Nov. 30 to vote on the separation of its Specialty Chemicals unit and said a €1 billion special cash dividend as advance proceeds will be paid on Dec. 7, following shareholder approval for the separation.
Azko Nobel called a three-month truce with Elliott in August. Elliott, the company's biggest shareholder have been at odds since Akzo Nobel rejected a €26 billion takeover bid from PPG earlier this year.
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