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Akzo Nobel Q4 Profit Surges - Quick Facts

Akzo Nobel NV (AKZOY.PK,AKZOY) on Wednesday reported that its net income attributable to shareholders for the fourth quarter surged to 5.85 billion euros from 75 million euros in the previous-year quarter. Earnings per share from total operations grew to 22.83 euros from 0.29 euros a year ago.

The latest quarter's results include net income from discontinued operations of 5.82 billion euros on the sale of the Specialty Chemicals business to Carlyle Group and GIC for an enterprise value of 10.1 billion euros in October 2018.

Adjusted earnings per share from total operations were 0.41 euros, compared to 0.86 euros last year.

Operating income fell 51 percent to 68 million euros from 139 million euros in the year-ago period.

Operating income for the quarter includes 113 million euros adverse impact from identified items, mainly related to one-off non-cash pension costs of 57 million euros based on a UK legal precedent set in October 2018 for the Guaranteed Minimum Pensions equalization regulations and transformation costs.

However, adjusted operating income rose 2 percent to 181 million euros from 178 million euros in the year-ago period, driven by pricing initiatives and cost savings programs.

Revenue for the quarter rose 1 percent to 2.31 bilion euros from 2.28 billion euros last year.

Revenue also increased 4 percent in constant currencies, with positive price/mix partly offset by a 7 percent decline in volumes. Pricing initiatives contributed to positive price/mix of 9 percent overall in response to higher raw material cost.

The company said it has proposed a 2018 final dividend of 1.43 euros per share, which would equal a total 2018 dividend of 1.80 euros per share.

The company will also distribute 1.0 billion euros by means of a special cash dividend of 4.50 euros per common share on February 25, 2019.

Looking ahead, Akzo Nobel said it is executing its transformation to deliver the next 200 million euros cost savings by 2020, incurring one-off costs in 2019 and 2020.

The company is targeting a leverage ratio of between 1.0 to 2.0 times net debt/ EBITDA by the end of 2020 and said it is committed to retain a strong investment grade credit rating.

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