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Electrolux profits fall

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10:27 CEST+02:00
Electrolux, the world's largest producer of appliances and equipment for kitchen, cleaning and outdoor use, said on Tuesday that net profit fell in the second quarter as raw materials and

component prices climbed substantially.

Net profit fell 3.5 percent to 1.19 billion kronor in the three months to June 30.

Sales rose to 33.9 billion kronor from 31.9 billion, but materials cost 1.3 billion kronor more in the second quarter than in 2004, eroding margins.

Electrolux said it had reduced the net impact of the cost increase by reducing costs elsewhere, but had been unable to compensate for all of it and the company would continue to suffer from the level of input prices.

For the full-year 2005, operating profit, which was 1.89 billion kronor in the second quarter after 1.782 billion a year earlier, was still expected to be "somewhat lower than last year", chief executive officer Hans Stråberg said in a statement.

Increases in the appliance maker's sales were focused on the United States, Latin America and Australia, with Europe showing only limited and fragmented increases in turnover.

AFP

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