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Akzo Nobel first-quarter core profit up 19 percent on higher prices

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By Reuters
Akzo Nobel first-quarter core profit up 19 percent on higher prices
FILE PHOTO: Dulux paint cans are filled on the production line inside AkzoNobel's new paint factory in Ashington, Britain September 12, 2017. REUTERS/Phil Noble/File Photo   -   Copyright  Phil Noble(Reuters)

AMSTERDAM (Reuters) – Dutch paints and coatings maker Akzo Nobel on Wednesday met analyst expectations with a 19 percent increase in core profit to 248 million euros (£215.6 million), as higher prices and cost savings offset raw material inflation.

Revenues were flat at 2.19 billion euros, despite falling sales volumes in China and other regions, while Akzo said it was on track to meet its financial targets set for 2020.

“We’re encouraged by the underlying business performance during this seasonally low quarter,” CEO Thierry Vanlancker said in a statement.

Raw material inflation cost 77 million euros in the first quarter and will continue in the first half of 2019, the company said, but at a lower rate than last year.

Akzo maintained its target of increasing return on sales to 15 percent by 2020, as the margin improved to 9.1 percent in the first three months of the year. Overall cost savings were on track to reach 200 million euros next year, Vanlancker said.

Akzo sold its specialty chemicals unit last year for 10 billion euros to a group of buyers led by Carlyle Group, after a bitter fight with shareholders to prevent an unwanted takeover by U.S. rival PPG Industries .

(Reporting by Bart Meijer; editing by Gopakumar Warrier and Jason Neely)