Electrolux says profit hit by supply chain disruptions

SWEDISH home appliance maker Electrolux said on Thursday (Jul 21) that supply chain disruptions massively impacted its bottom line in the second quarter, and warned that uncertainty would continue to cloud the outlook for the rest of the year.

Electrolux said in a statement that its net profit plunged by 81 per cent to 257 million Swedish kronor (S$35 million) in the period from April to June.

Analysts polled by financial data company Factset had been pencilling in net profit of some 650 million kronor for the second quarter.

Investors were disappointed by the figures, with Electrolux shares plummeting 8 per cent on the Stockholm stock exchange.

“As in the first quarter, we were impacted by significant supply chain challenges,” said chief executive Jonas Samuelson.

“The irregular deliveries of multiple components, mainly electronics, continued to significantly impact our volumes, cause severe production inefficiencies and increase costs for airfreight,” he said.

By contrast, second-quarter sales increased by 11 per cent to 33.7 billion kronor, as higher selling prices offset the supply crunch.

Electrolux said it was still unable to meet demand, especially in its laundry and premium cooking segments.

“We continue to collaborate closely with our suppliers to mitigate these supply chain constraints and expect sequential improvements from mid-2022,” Samuelson said, noting the risk of further disruptions still loomed.

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Samuelson also said that given the “historically high levels, increased interest rates, global supply chain constraints, as well as uncertainty regarding the coronavirus pandemic and the war in Ukraine, the visibility for the rest of the year is limited”. AFP