Electrolux dips into red as energy prices soar

Swedish home appliances maker Electrolux reported a net loss for 2022 on Thursday as its business was weighed down by inflation, higher interest rates and soaring energy prices.

The company was 1.32 billion Swedish kronor ($128 million) in the red last year, down from a net profit of 4.7 billion kronor in 2021.

“In 2022, new challenges presented themselves in addition to supply chain constraints: high general inflation, raised interest rates, soaring energy prices, and increased geopolitical tensions,” Electrolux chief executive Jonas Samuelson said in a statement.

“These negatively impacted consumer demand for household appliances, especially evident in the latter part of the year,” Samuelson added.

In the fourth quarter alone, the company reported a net loss of 1.9 billion kronor, down from a net profit of 596 million a year earlier.

Net sales in the fourth quarter reached 35.8 billion kronor, up slightly from the same period a year earlier, and for the full year came in at 134.9 billion kronor.

In January, the company issued a profit warning for its fourth quarter of 2022, due to high costs and poor performance in North America.

Electrolux announced last year a cost-cutting programme in view of weaker demand and earnings, and subsequently said it would cut up to 4,000 jobs, mainly in North America.

On Wednesday, it said it would close one of its two factories in Hungary, affecting some 650 employees.

“Looking into 2023, consumer sentiment is anticipated to continue to be negatively impacted by a high inflation and interest rate environment, although with regional differences,” Samuelson said, adding that volumes were expected to decline.

Electrolux saw a boon during the pandemic as house-bound consumers turned their attention to refreshing their homes, but the company was then hit with supply-chain disruptions and is now struggling to adapt to weaker demand. — Agence France-Presse