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ELECTROLUX

Electrolux profits slide after restructuring

Electrolux, the world's biggest producer of appliances for kitchen, cleaning and outdoor use, reported on Tuesday a near halving of net profit owing to heavy restructuring costs.

Published: 14 February 2006 18:28 CET

Net profit dropped by 44.5 percent to 1.76 billion kronor from 3.25 billion kroner in 2004.

In 2005, Electrolux undertook major restructuring efforts which included the closure of a number of its plants in western Europe.

Without the restructuring costs, profit would have been 4.61 billion kronor, against 4.54 billion kronor.

In the fourth quarter alone, Electrolux posted a net loss of 440 million kronor, against a profit of 748 million in the fourth quarter of 2004.

Its quarterly pre-tax loss, at 237 million kronor, was still much smaller than had been expected by analysts, who had forecast a loss of 859 million kronor.

Despite the weaker results, Electrolux said it would pay a dividend of 7.50 kronor per share, against 7.00 in 2004.

It also said it would seek a separate stock market listing for its outdoor appliances, essentially for gardening, under the name of Husqvarna AB.

AFP

ELECTROLUX

Sweden’s Electrolux sees big US deal stopped

UPDATED: Shares in Swedish white goods giant Electrolux plummeted on Monday morning after US firm General Electric, which was poised to sell its appliance division to the Nordic firm, cancelled the agreement.

Published: 7 December 2015 09:50 CET
Updated: 7 December 2015 13:56 CET
Sweden's Electrolux sees big US deal stopped
Electrolux's office in Kungsholmen, Stockholm. Photo: Fredrik Persson/TT
Electrolux, which sells brands including Frigidaire, AEG and Zanussi as well as its own name, is already the world's second-largest home appliance maker after Whirlpool.
 
It announced a year ago that it wanted to buy part of General Electric (GE).
 
But the US firm said on Monday that it has decided to cancel the agreement to sell its appliance division to the Swedish group which had offered last year to buy it for $3.3 billion.
 
The US Department of Justice had threatened to sue Electrolux and GE over concerns the deal would create a duopoly and hand Electrolux a US market share of some 40 percent.
 
Electrolux said it had made extensive efforts to obtain regulatory approval, and said it “regrets” that GE had terminated the agreement while the court procedure was still pending.
 
“Although we are disappointed that the acquisition will not be completed, Electrolux is confident that the Group has strong capabilities to continue to grow and develop its position as a global appliances manufacturer”, said Keith McLoughlin, President and CEO of Electrolux in a statement.
 
Shares in Electrolux — one of Sweden's most famous brands — initially dropped by 14 percent after the decision was announced, and remained 12 percent lower by mid-morning.
 
The failed deal has already cost the company millions of kronor in preparatory work and General Electric has requested a termination fee of $175 million.
 
GE revealed in a statement that it was still interested in selling the appliance division.
 
Monday's announcement took some analysts by surprise.
 
“I was surprised this deal was contested by the Justice Department, but then when we saw what their concern, which was the creation of duopoly in a part of the appliance market, it began not to look so good,” said Karri Rinta, an analyst with Handelsbanken Capital Markets.
 
“It's back to square one for Electrolux in North America. This is a deal that would have made them much stronger in the US especially against Samsung and LG,” he said.