Indesit Company have reported first quarter revenue of €560.1 million, compared to €599.5 million in the first quarter of 2013.
Indesit blames lower revenue on lower sales volumes, especially in Russia, and on the significant devaluation of the Russian ruble, the Turkish lira, and the Ukrainian hryvnia.
Indesit’s CEO Marco Milani said the first quarter of 2014 results indicate that actions taken to preserve profitability are working. However, he added, “The strengthening of the euro against the currencies of important countries for the Group, such as Russia, Turkey and Ukraine, penalised turnover and margins.”
Profits were gained, however, through product cost reduction efforts, better pricing, and a better sales mix that leverages the company’s newest high-performance, high-efficiency appliances. The company saw increased profitability in all areas except Russia, where profits were hurt by currency impacts.
“Promising signs for the rest of the year are visible in market demand indicators, especially in West European countries such as Italy, which confirm forecasts of a slight improvement in 2014 compared to the previous year,” Milani said.
Indesit estimates that first quarter of 2014 shipments in the home appliance market grew 2.3% in Western Europe and 1% in Eastern Europe. Demand in Greater Europe overall was up 2%.
Indesit Company has been active for decades in Eastern European countries, and is a leading appliance company in Romania, Bulgaria, and Ukraine. It also has industrial presence in Poland and Turkey.
At around about the same time though a top investor in Indesit said it had not taken yet a decision regarding its stake in the loss-making white goods maker adding the company could still opt to go ahead on a stand-alone basis.
And, separately activist investor Amber, which holds a 1.27% of Indesit, told a shareholder meeting that company should seek a tie-up with an international partner. This will likely lead to further speculation over a tie up, merger or some sort of deal with another large player such as Electrolux who have been widely mooted to be open to this notion.
In November Fineldo, the biggest shareholder in Indesit with a stake of around 43 percent, hired an adviser to assess options for its investment in the company.
“Nothing is certain, it could be that we decide to go ahead on a stand-alone basis … there is no hurry,” Aristide Merloni, who manages Fineldo’s voting rights in Indesit, said, adding that a “merger, a tie-up, a sale” were other options.
In November Italian newspaper Il Sole 24 Ore said Indesit may partner with an international group such as Electrolux , Whirlpool, General Electric and Arcelik, which led to share gains at the time.