Electrolux, the world’s largest supplier of white goods, Thursday reported lower sales and profits and warned that higher steel prices could hit earnings in the second half of the year.
The Swedish group said the fall in profits was mainly the result of problems in its vacuum cleaner business in the US where price falls and weak demand for high end products had hit profitability.
The company has also been experiencing difficulties in its Australian operations with a reduction in customs duties and the strong Australian currency have favouring imports.
In the three months to June 30 Electrolux’s pre-tax profit fell to SKr1.715bn ($231bn) from SKr2.334bn on sales down 4 per cent to Skr31.950bn.
Excluding items affecting comparability, pre-tax profits fell 9 per cent to SKr2.121bn.
The company maintained its full-year outlook that operating profits, excluding items affecting comparability would be somewhat lower than in 2003.
“However, there is a risk that higher costs of steel could have an increasingly negative impact on income for the second half of the year,” it added.
From The Financial Times