The Swedish household appliance group Electrolux recorded an 81% drop in net profit on Thursday compared to the second quarter last year. Performance was affected by ‘significant challenges’ in its supply chain.
Net profit for the second quarter amounted to 257 million crowns (regarding 24.6 million euros), while analysts expected a net profit of 650 million crowns, according to Factset. Turnover amounted to 33.7 billion crowns, compared to 30.3 billion in the second quarter of 2021, an increase of 11%, explained by high prices.
“Irregular deliveries of several components, primarily electronics, continued to affect our volumes, causing severe production inefficiencies,” Electrolux chief executive Jonas Samuelson said in a statement. According to the group, these difficulties have also caused an increase in the cost of air freight and unplanned purchases.
Already in the first quarter, the Swedish group had forecast that the global supply crisis would affect it once more in the second quarter. The group also says that it is still unable to fully meet demand, particularly for laundry and ‘premium’ kitchen equipment.
“We continue to work closely with our suppliers to mitigate these supply chain constraints and expect sequential improvements from mid-2022,” added Jonas Samuelson, noting that disruptions to the resurgence of Covid-19 and the consequences of the war in Ukraine might continue. A few hours following the opening of the stock market, Electrolux shares lost 8.5%, or 134.2 crowns (12.9 euros)
In a context marked by inflation, rising interest rates and uncertainty in the face of the Covid-19 pandemic and the war in Ukraine, the household appliance group highlights ‘limited visibility’ to assess the rest of the year.
/ATS
