The world's largest maker of paint, Akzo Nobel NV, reported a smaller net loss as the demand began to recover in the key markets due to a big write-off last year.

Net loss reported amounted to Euro 60 million versus a loss of Euro 1.51 billion the previous year. Sales fell 7% to Euro 3.31 billion.

"The stabilization we reported at the end of the third quarter has continued. However, we believe the recovery is fragile and will be slow", said Chief Executive Hans Wijers.

By lower purchasing costs and lower restructuring, the operating profits at the company's three main divisions were sustained.

Brands like Glidden and Dulux, which are the decorative paint arms, reported that the volumes fell 4% and operating profits fell 24% to Euro 71 million.

Deals with Home Depot and Martha Stewart Living in the U. S. have been announced by Akzo.

At the company's chemical making operations, sales fell 9% but operating profits rose 16% to Euro 217 million.

Akzo Nobel, which has an employee base of 57000, has cut 3,000 staff members, indicating that the higher financing expenses could push the company to a loss, inspite of the operating profits.