Electrolux’ profit falls, sees supply chain headwinds into 2022
October 27, 2021
STOCKHOLM (Reuters) -Sweden’s Electrolux warned on Wednesday it may struggle to meet demand next year due to global supply chain challenges after its profit slumped in the third quarter as component shortages hampered production.
Europe’s biggest home appliances maker said it still expects demand to normalise above pre-pandemic levels but flagged limited availability of some product categories throughout the year, with regional variances.
“We continue to have a tight collaboration with suppliers to mitigate global supply shortages, but we estimate that the fourth quarter will be even more challenging than the third quarter,” the rival to Whirlpool said in a statement.
“Although we anticipate sequential improvements in 2022, we expect challenging conditions to remain in meeting continued strong demand.”
Households have been spending more on their homes, including on appliances, during the pandemic, and Electrolux expects demand to stay above pre-pandemic levels in the long run amid a bigger focus on home improvement and hygiene.
The company’s third-quarter operating profit fell to 1.64 billion crowns ($191.3 million) from 3.22 billion a year earlier.
Sales shrank 3% and price hikes did not fully offset higher costs for ocean freight and electronic components.
Analysts polled by Refinitiv had on average forecast a 1.66 billion crown profit.
In the third quarter of 2019, Electrolux generated a profit of 1.19 billion crowns.
Electrolux’ shares were down 3% in early trade.
($1 = 8.5737 Swedish crowns)
(Reporting by Anna Ringstrom; editing by Niklas Pollard and Jason Neely)