From the Wall Street Journal: By JOON KNAPEN DOW JONES NEWSWIRES April 20, 2004 11:08 a.m. AMSTERDAM — Akzo Nobel NV said Tuesday its first-quarter net profit fell 4.3% as charges and other costs ate into its earnings. The coatings, chemicals and pharmaceuticals company, of Arnhem, the Netherlands, earned €133 million ($159.9 million), or 47 European cents a share, compared with €139 million, or 49 cents a share. The result included impairment charges, restructuring costs for an Organon production site in New Jersey, and a settlement with generic-drug manufacturers in a court case over antidepressant Remeron, at a total cost of €43 million in the quarter. Revenue slipped 4.6% to €3.14 billion from €3.29 billion, reflecting faltering drug sales and the weak U.S. dollar. The pharmaceuticals unit’s first-quarter sales fell 7.1% to €821 million from €884 million, hit by a rapid decline in U.S. sales of Remeron. Akzo warned that its success in the pharmaceuticals sector is still some way off. “Our pharma business had a tough quarter, ” said Chief Financial Officer Fritz Froehlich, adding: “In the course of this year, we will have a rough ride in pharma.” Akzo has high aspirations for its pharmaceuticals business, where profit margins are juicer than in paints and chemicals. Akzo plans to sell three of its chemicals businesses — catalysts, coating resins and phosphorus chemicals. On Monday, Akzo received a €625 million bid for its catalyst business, the largest unit, from U.S. firm Albemarle Corp. “Although Akzo’s first-quarter results came in slightly above expectations, with chemicals and coatings showing some signs of underlying improvements, the pharma outlook remains grim,” analyst Bert Siebrand of Bank Oyens said. The company also stuck to its conservative forecasting policy, repeating its outlook that 2004 profit, excluding charges and other items, could fall below that of 2003, when the company recorded a €811 million profit.

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