By Anna Ringstrom
STOCKHOLM (Reuters) -Electrolux warned on Wednesday it may struggle to meet demand through the rest of the year and into 2022 due to global supply-chain challenges, after its profit slumped in the third quarter as component shortages held back production.
Europe’s biggest home appliances maker said it still sees demand normalising above pre-pandemic levels but flagged limited availability of some product categories through the year, with regional variances.
“We continue to have a tight collaboration with suppliers to mitigate global supply shortages, but we estimate that the fourth quarter will be even more challenging than the third quarter,” the rival to Whirlpool said in a statement.
“Although we anticipate sequential improvements in 2022, we expect challenging conditions to remain in meeting continued strong demand.”
Global shortages of semiconductors and other electronic components will continue to be the biggest issue, hitting primarily the production of cookers and washing machines, CEO Jonas Samuelson told Reuters.
In the third quarter, Electrolux’ North America business, which ships some ready assembled products from China, was particularly affected due to congestion at big U.S. ports, he said.
The Swedish group assembles most of its products in the regions they are sold.
Households have been spending more on their homes, including on appliances, during the pandemic, and Electrolux expects demand to stay above pre-pandemic levels in the long run amid a bigger focus on home improvement, cooking at home and hygiene.
The group’s third-quarter operating profit tumbled 49% to 1.64 billion crowns ($191 million) as sales shrank 3% and price hikes did not fully offset higher costs for ocean freight and electronic components. The year ago-quarter was unusually strong due to the stay-at-home trend and pent-up demand from earlier in the pandemic.
Compared with the pre-pandemic third quarter of 2019, profits were up from 1.19 billion crowns.
Analysts polled by Refinitiv had on average forecast a 1.66 billion crown profit.
Electrolux shares, which have bounced from a nine-month low of 178.84 set in early October, were down 1.6% at 193.95 crowns by 1035 GMT.
($1 = 8.5737 Swedish crowns)
(Reporting by Anna Ringstrom; Editing by Jason Neely and David Holmes)