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Electrolux swings to Q4 loss
Source: Agencies |
February 4, 2009, Wednesday
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SWEDISH appliance maker Electrolux AB said today it swung to a loss of 474 million kronor (US$57 million) in the fourth quarter as the global financial turmoil drove up costs and forced it to impose temporary production shutdowns.
The group, which in December announced it would lay off 3,000 staff worldwide, also refrained from giving a forecast for 2009 and said it would freeze wages this year due to the uncertainty on the market.
Weighed down by costs of nearly 1.1 billion kronor because of the recent layoffs, the fourth quarter fell to the loss compared with profits of about 1.1 billion in the same three months a year earlier.
The company said earnings were also hurt by weaker demand, higher costs for raw materials and temporary shutdowns of production plants to prevent inventories from building up.
However, sales for the quarter saw a boost from favorable exchange rates and rose to 28.7 billion from 27.6 billion in the fourth quarter of 2007.
"We have had a difficult 2008, and 2009 will not be easier, as we do not see any signs of short-term market improvement," Group Chief Executive Hans Straberg said in a statement. "When demand picks up, the key is to have the right structure, the right products and a competitive cost level. This we have."
Straberg said no dividend would be paid out to shareholders for 2008.
"This proposition is logical considering the great uncertainty in the market in 2009 and our cash commitments related to restructuring activities," he said.
The share rose 3.5 percent to 64.50 kronor in Stockholm on the report, which was in line with market expectations.
For the full year 2008, profits came to 366 million kronor, down from 2.9 billion kronor in 2007.
The group, which in December announced it would lay off 3,000 staff worldwide, also refrained from giving a forecast for 2009 and said it would freeze wages this year due to the uncertainty on the market.
Weighed down by costs of nearly 1.1 billion kronor because of the recent layoffs, the fourth quarter fell to the loss compared with profits of about 1.1 billion in the same three months a year earlier.
The company said earnings were also hurt by weaker demand, higher costs for raw materials and temporary shutdowns of production plants to prevent inventories from building up.
However, sales for the quarter saw a boost from favorable exchange rates and rose to 28.7 billion from 27.6 billion in the fourth quarter of 2007.
"We have had a difficult 2008, and 2009 will not be easier, as we do not see any signs of short-term market improvement," Group Chief Executive Hans Straberg said in a statement. "When demand picks up, the key is to have the right structure, the right products and a competitive cost level. This we have."
Straberg said no dividend would be paid out to shareholders for 2008.
"This proposition is logical considering the great uncertainty in the market in 2009 and our cash commitments related to restructuring activities," he said.
The share rose 3.5 percent to 64.50 kronor in Stockholm on the report, which was in line with market expectations.
For the full year 2008, profits came to 366 million kronor, down from 2.9 billion kronor in 2007.
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