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PPG Industries Inflates Net Income 10.2% With Russian Reserve Release
Coatings manufacturer’s Russian operations deliver after previous $290 million impairment.
July 25, 2022
PPG Industries (PPG), a maker of paints, coatings, and special materials, would have reported a YoY decline in net income if not for a big boost from its Russian operations. The company had previously recorded a $290 million impairment related to the “wind down” of its Russian operations following the country’s attack on Ukraine.
In the latest quarter, PPG released a portion of the previously established reserves due to the collection of certain trade receivables and recorded recoveries due to the realization of certain previously written-down inventories. The release resulted in the recognition of $60 million which— based on a 20.8% tax rate— inflated reported net income by 10.2%.
Without the reserve release, PPG would’ve reported approximately $400.8 million in net income, or a YoY decline of 7%.
PPG has not yet decided the fate of its Russian operations, which include a possible sale or what the company calls a “controlled withdrawal. If customers in the region continue to pay— resulting in additional future reserve releases— it may become increasingly difficult for PPG to turn its back on Russia.
Related: FUL, MMM, SHW, ECLE, DG, SXT, RPM, ASH
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