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Sweden's Electrolux reports profits slump

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Sweden's Electrolux reports profits slump
11:06 CEST+02:00
Swedish household goods manufacturer Electrolux reported a 50 percent drop in net profits for the first quarter on Wednesday, citing a rise in raw materials costs.

In the first three months of the year, net profit fell to 457 million kronor ($75 million) from 911 million kronor in the same period of last year.

Analysts polled by Dow Jones Newswires had expected a fall of 42.0 percent.

The price of shares in the company slipped by 0.18 percent in early trading. The overall stock market in Stockholm fell by 1.30 percent.

The company, the second-biggest manufacturer in its sector in the world after US group Whirlpool, said that it had not passed on the increased costs of raw materials and that it had also suffered from unfavourable exchange rates against the krona.

Sales fell by 7.0 percent to 23.4 billion kronor. Excluding the effect of exchange rates, sales rose by 0.9 percent owing to strong sales in Central and South America and in the Asia-Pacific region. Sales of small devices were also strong.

Electrolux said it expected to catch up a rise in the costs of steel, plastic, copper and aluminium, by putting up prices in the second quarter.

Chief executive Keith McLoughlin said that the rise of input costs, notably of plastic, would have an impact of 2.0 billion kronor this year.

"Our ambition is to gradually compensate for the increase in costs through price increases, improvements in product mix and costs savings," he said.

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