STOCKHOLM (dpa-AFX) - Shares of Electrolux AB (0MDT.L, 0GQ1.L, ELUXY.PK) were gaining around 5 percent in the trading in Sweden after the home appliances giant reported higher profit and sales in its first quarter.
President and CEO Jonas Samuelson said, 'We will continue to drive profitable growth by creating best-in-class consumer experiences which are supported by innovation and operational excellence. The work to increase net cost efficiency throughout the Group is making good progress and will, together with improved product mix, support our target of reaching a sustainable profitability with margins of at least 6 percent.'
For the first quarter, income climbed 24 percent to 1.08 billion Swedish kronor from 875 million kronor in the last year. Earnings per share were 3.75 kronor compared to 3.03 kronor.
Operating income increased 21 percent to 1.54 billion kronor from 1.27 billion kronor, corresponding to a margin of 5.3 percent compared to 4.5 percent, in the prior year, with improved results across all business areas.
The company noted that operating income for Major Appliances EMEA was stable, while margin improved. Operating income for Major Appliances North America continued to develop favorably due to cost efficiencies. Professional Products also reported a good earnings trend.
Operating income for Major Appliances Latin America and Home Care & SDA recovered, the company said.
First-quarter net sales were up 2.7 percent to 28.88 billion kronor from 28.11 billion kronor a year ago. Organic sales, meanwhile, declined by 3 percent, while currency translation had a positive impact of 6 percent on net sales.
The company noted that market demand for appliances in Europe was stable, although the UK declined. Demand in Middle East and Africa also declined.
Looking ahead, for fiscal 2017, the company said it confirms outlook for the European market and expect a market growth of approximately 1 percent, while it expects market demand for appliances in North America to grow by 2-3 percent.
Further, the company said that due to rising prices for raw materials, it now expects the negative impact from higher costs for raw materials to be 1.4 billion kronor in 2017. Further, the company has accelerated cost efficiency efforts and now expects to deliver net cost efficiency of 2.2 billion kronor in 2017.
In Sweden, Electrolux were trading at 275 kronor, up 5.28 percent.
Copyright RTT News/dpa-AFX