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Assa Abloy to shed 1,000 jobs

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15:42 CEST+02:00
Swedish locks firm Assa Abloy has announced that 1,000 jobs will be cut and 15 factories closed despite posting improved second quarter profits on Wednesday.

Assa Abloy, the world's largest lock maker, posted second-quarter pre-tax profits of 1.19 billion Swedish kronor ($198 million) on Wednesday, from 1.13 billion kronor in the corresponding period of 2007.

Profit was in line with market expectations. The mean forecast in a Reuters poll of 14 analysts had been for 1.18 billion kronor.

The firm announced the cut of 1,000 jobs and the closure of 15 factories. It was not made clear when the redundancies will take place.

"Assa Abloy's sales development was strong during the quarter despite a continuing weakening of western European markets. The structural rationalization program and other efficiency raising measures continue to raise our gross margins," said President and CEO Johan Molin.

Turnover amounted to 8,536 million kronor in comparison with 8,329 million kronor in the corresponding period of 2007.

Assa Abloy is seeking to raise the pace of its restructuring program and has started a review of production structures in high cost countries, the company wrote its report.

The company reiterated that it expected its operating margin and operating cash flow to develop well but said that organic growth may drop to below 3 percent in 2008.

The firm's previous forecast had been for organic growth of between 3 and 5 percent.

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