Published on April 27th, 2018 | by The GC Team0
Electrolux profits hit by restructuring and raw material costs
Electrolux profits almost halved in the first-quarter of 2018 due to restructuring costs of SEK 596m relating to the consolidation of the firm’s freezer production in North America and accelerated increases in raw material costs.
Operating income for the period amounted to SEK 764m, down from SEK 1,442m in the prior year period. Earnings fell from SEK 1,012 to SEK 551m.
President and CEO Jonas Samuelson said: The increase in raw material costs accelerated in the quarter, partly due to the announcement of trade barriers for steel in the US, but also other metals, plastics and logistics costs increased further.”
Electrolux is now estimating the negative year-over-year impact from higher costs for raw materials to be in the region of SEK 1.6 to 1.8bn in 2018. Samuelson said the business needs to continue its cost efficiency efforts and further improve pricing in most key markets.
Revenue during the quarter slipped from SEK 28,201m to SEK 27,906m.
Earlier this week Whirlpool reported first-quarter net earnings down from $153 million to $94 million. Net sales edged up slightly, from $4.8 billion to $4.9 billion.