STOCKHOLM: Home appliances maker Electrolux posted a smaller-than-expected fall in fourth-quarter profit on Friday marred by US production issues and warned the outbreak of the new coronavirus in China would impact its sourcing.
The Swedish maker of brands such as Electrolux, Frigidaire and AEG said the fast-spreading epidemic could have a “material financial impact” if its Chinese suppliers were further affected.
“As we are sourcing significant volumes of finished products and components from China to all our business areas, we are now implementing contingency plans to mitigate a potential extended period of supply disruptions,” CEO Jonas Samuelson said.
The rival of US firm Whirlpool said adjusted operating earnings fell to 960 million Swedish crowns (RM406 mil) from 1.67 billion, but that beat the 903 million expected by analysts, Refinitiv Eikon data showed.
The results excluded its Professional Products business which is due to be spun out to shareholders and listed separately in the first quarter.
The company warned in December that earnings in North America would be hit to the tune of US$70 million in the fourth quarter, mainly due to the slower-than-anticipated start-up of a new refrigerator and freezer plant in Anderson, South Carolina.
“Given this situation, lower volumes and higher costs will impact earnings for the first quarter 2020 resulting in a loss for business area North America,” Samuelson said.
Looking at 2020, Electrolux said it expected little year-on-year impact from the combination of tariffs, material prices and currency swings that yielded a roughly 1.6 billion crown headwind last year. – Jan 31, 2020, Reuters
