STOCKHOLM (Reuters) – Europe’s biggest home appliance maker Electrolux said on Thursday that it expects a significant second-quarter loss due to the impact of the coronavirus and saw sales plunge 30% in April.
As lockdown restrictions in its major markets start to ease, the company said revenues should start to gradually recover going forward.
The maker of brands such as Frigidaire and Anova had warned in March that lockdowns in several large markets due to the pandemic had caused a sharp decrease in demand and had hit production.
Electrolux shares were down 2.2% by 0743 GMT, and have now shed 31% since the start of 2020.
Electrolux estimated on Thursday a 400 million crown ($41 million) direct impact on first-quarter operating earnings from the pandemic, and said it had a currency headwind of about 600 million crowns “to a large extent indirectly linked to the coronavirus’ impact on the global economy”.
The Swedish company, a rival of U.S. Whirlpool, reported first-quarter earnings that came in well above expectations, but said the impact of the coronavirus affected operations with an increasing force towards the end of the quarter and into April.
“For the second quarter in 2020 we expect a significant loss,” CEO Jonas Samuelson said in a statement.
“We have implemented comprehensive actions to mitigate the impact on earnings and cash flow from this exceptional market situation.”
Electrolux has moved to cut costs and protect cashflows as the pandemic spread across the globe, with actions including furloughing staff, slashing discretionary spending and reprioritizing capital expenditures.
This would affect its large strategic investments in the United States, with the completion of its cooking products facility in Springfield, Tennessee, seen delayed by up to six months, it said on Thursday.
China, where the pandemic began, is a major sourcing hub.
“We have worked extensively to mitigate the impact from the initial outbreak in China, from where we source significant volumes of finished products and components, resulting in a limited impact in the first quarter,” Samuelson said.
Electrolux reported a 122 million crown operating profit for the first quarter, up from a 53 million loss a year earlier when it had large one-off costs, and above the 19 million profit seen in a Refinitiv analyst poll.
Whirlpool last week reported quarterly earnings above market expectations, and said it expected organic sales to fall 10-15% this year.
($1 = 9.8142 Swedish crowns)
(Reporting by Johannes Hellstrom; editing by Simon Johnson and Susan Fenton)