FAIRFIELD (dpa-AFX) - European home appliances giant Electrolux AB (0MDT.L, 0GQ1.L, ELUXY.PK) Friday reported a profit for the second quarter, compared to a loss last year, with significant sales growth. The company said all its six business areas contributed positively to organic growth. The stock gained more than 3 percent in early trade.
Income totaled 608 million Swedish kronor, compared to a loss of 92 million kronor in the previous year.
Net sales increased to 31.355 billion kronor from 26.330 billion kronor in the prior year. Of the 19.1 percent sales growth, 7 percent was organic sales growth, 0.1 percent came from acquisitions and 12 percent was due to currency translation.
Operating income was 921 million kronor, corresponding to a margin of 2.9 percent. This compares to operating income of 63 million kronor last year, with a margin of 0.2 percent. In the prior year, restructuring costs of 1.1 billion kronor were charged to operating income.
The financial performance of the Group's largest business area, Major Appliances EMEA, strengthened as a result of positive organic growth and favorable contributions from cost savings.
Operations in North America reported good organic growth, driven by high sales volumes of air-conditioners. Yet, results continued to be impacted by the transition of the product ranges within refrigeration and freezers, and by the ramp-up of the cooking plant in Memphis. Electrolux sees full-year market growth in North America in the range of 3-5 percent.
Market demand grew 4 percent in Western Europe, but fell 23 percent in Eastern Europe, due to the sharp downturn in Russia and Ukraine.
Electrolux expects the total European market for appliances to grow 1-2 percent in 2015, although the development in Eastern Europe is difficult to assess.
Additionally, the firm said Major Appliances Latin America performed well in tough market conditions coupled with currency transaction headwinds, but the macro-economic outlook for the region remains highly uncertain.
The company said, following the U.S. Department of Justice intervention in its proposal to acquire GE Appliances, the review of the proposed acquisition will now continue in a court procedure.
Electrolux does not agree with the DOJ's assessment that the acquisition will harm competition. The company plans to vigorously contest this effort by the DOJ to oppose the transaction.
The stock gained 3.6 percent in early trade in Stockholm at 266.80 kronor.
Copyright RTT News/dpa-AFX