STOCKHOLM – Swedish home appliance maker Electrolux today said it will hike prices as costs for raw materials have risen, and that it expects a shortage of electronic components to worsen.
The company, like many other manufacturers, has seen its production hobbled by a global shortage of semiconductors that are a key element in a range of electronics and appliances.
“The market for electronic components is expected to be somewhat more constrained in the third quarter, hence, we anticipate challenges to fully meet the market’s product mix requirements,” CEO Jonas Samuelson was quoted as saying in a statement accompanying quarterly results.
The impact will be greater in the rest of the year than it was in the first half, he said.
Samuelson said Electrolux has navigated the constrained supply situation well so far thanks to the efforts of its suppliers and staff, and pointed to a 16% increase in like-for-like sales from the second quarter in 2019.
Net sales, at 30.3 billion kronor (RM14.8 billion), were down 4.4%, but operating profit went up 22.5% to 2.0 billion kronor.
Net profit came in at 1.4 billion kronor, below the analyst consensus of roughly 1.5 billion kronor calculated by Factset and Bloomberg, but up by more than a fifth from 2019.
Samuelson warned, however, of increased pressure on margins “as costs for raw materials, electronic components and logistics are increasing further”.
The company now estimates the negative impact of increased raw material costs, tariffs and labour cost inflation at up to 3.5 billion kronor this year, compared with an earlier forecast of up to 2.8 billion kronor.
Samuelson said Electrolux announced and started implementing additional price increases in response.
He added that market demand, which has been doped by stimulus measures in some regions, is expected to begin returning to normal moving forward. – AFP, July 20, 2021
