April 22, 2022: -On Thursday, Akzo Nobel reported stronger-than-expected quarterly core earnings as higher pricing helped offset supply chain issues, a coronavirus resurgence in China, and Russia’s impact on Ukraine.

In a statement, Chief Executive Thierry Vanlancker said that the group’s “vigorous pricing initiatives” had helped it manage “the unprecedented variable cost inflation that impacted our industry in the quarter.”

The Dutch paints and coatings maker suggested problems linked to sanctions on Russia, the resurgence of the coronavirus in China, and supply chain constraints but said it is still expected raw material and different cost inflation to ease in the second half this year.

The bad impact of the war in Ukraine on Akzo Nobel’s first-quarter operating income was almost 5 million euros, the management added in a call with journalists.

In the previous week, the Amsterdam-based firm said its business in Russia represented about 2% of revenue before the war. It further said that its aerospace coatings activities, new investments, and marketing activities in Russia had already been suspended.

Because of supply chain issues and strong demand, developing raw materials costs have hitmakers of chemicals such as Akzo Nobel and PPG Industries.

Akzo’s surging prices by 17% said raw material and other variable costs were 334 million euros higher than in the first quarter of 2021, for which it did not give a baseline figure.

It reported an adjusted operating income of 230 million euros for the January to March quarter, down from 307 million euros in a similar period last year, with revenue increasing 12% to 2.52 billion euros. Both measures beat analysts’ forecasts.

The group confirmed its guidance for 2023 adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of 2 billion euros.