Elec­trolux prof­its slide in weak Euro­pean cli­mate

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Elec­trolux re­ported a 28-per cent drop in net profit in the first quar­ter ow­ing to the weak busi­ness cli­mate in Europe and a strong krona. The Swedish com­pany posted a net profit of 361 mil­lion kro­nor (42 mil­lion eu­ros, $55 mil­lion) in the Jan­uary to March pe­riod, while sales dipped by 2.0 per cent to 25 bil­lion. Those fig­ures came in be­low the forecasts of an­a­lysts sur­veyed by Down Jones Newswires, who had pre­dicted an aver­age net profit of 519 mil­lion and sales of 26 bil­lion. Elec­trolux said the slow­ing de­mand for house­hold ap­pli­ances in Europe had weighed down rev­enue, as con­sumers held back on pur­chases amid the slug­gish econ­omy. Sales in the Europe, Africa and Mid­dle East re­gion slid by 8.1 per cent to 7.6 bil­lion kro­nor. How­ever, sales im­proved in the North Amer­ica and Asia Pa­cific re­gions, ris­ing by 8.0 per cent to 7.7 bil­lion and by 5.8 per cent to 1.9 bil­lion re­spec­tively. Elec­trolux said the strong Swedish cur­rency, the krona, had a neg­a­tive ef­fect of 318 mil­lion kro­nor on its op­er­at­ing profit, which plunged by 30 per cent in the quar­ter to 638 mil­lion kro­nor. Chief ex­ec­u­tive of­fi­cer Keith McLough­lin, speak­ing to Swedish news agency TT, said there was “no point in p a n i c k i ng” about the c u r r e n cy ef­fects since they could not be con­trolled. In 2013, de­mand is ex­pected to de­cline in Europe but rise in North Amer­ica, Elec­trolux said. McLough­lin said the com­pany ex­pected the Euro­pean mar­ket to “be weak and get weaker. We don’t ex­pect any re­cov­ery in the first half of the year.” He noted how­ever that Rus­sia, Bri­tain, Fin­land and Nor­way were bright spots in Europe.

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