Electrolux Profits Soar in 2010

Feb. 2, 2011
Profits jump 53%

Electrolux, the world's second largest household appliance company, on Feb. 2 posted annual profits and dividend up more than 50%, but said 2011 would provide only "modest" growth amid rising costs for raw materials.

Thanks to the economic recovery seen in many countries last year as well as several plant closures, the Swedish company said its net profit jumped 53% to 4.0 billion kronor US$ 627 million) last year.

"Demand in our largest markets recovered somewhat in 2010," the company's new CEO Keith McLoughlin said in the earnings report, describing the full-year results as "the best ever for Electrolux," but cautioning that the market "continues to be very competitive."

"I see very good opportunities going forward to be able to continue to deliver a high return to our shareholders," said McLoughlin, who succeeded Hans Straaberg at the helm of the company at the start of the year. Nonetheless, the company saw its share price plunge more than five percent to 172.50 kronor within minutes of trading start on the Stockholm stock exchange, with observers hinting that a cautious outlook and smaller-than-expected dividend were to blame.

Electrolux meanwhile posted a 3% drop in sales to 106.33 billion kronor in 2010, but said that disregarding an unfavorable exchange rate its sales actually swelled 1.5%.

In the last quarter of the year, the company reported a net profit up just 2% at 667 million kronor on sales down 2% at 27.56 billion kronor.

In 2011, the appliance giant, which is second in the sector only to Whirlpool, forecast "modest" growth in sales, with demand up 2% in Europe and 3% in North America.

McLoughlin said the company would see "most of the growth in the second half of the year."

It said higher raw material costs were expected to dent its results to the tune of between 1.5 and 2.0 billion kronor, with most of the impact felt at the beginning of the year.

Copyright Agence France-Presse, 2011

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