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Electrolux profits plunge amid weak demand

Electrolux, a leading global maker of household appliances, posted Thursday a 48-percent plunge in net profit in 2011, as price pressure, high material prices and weak demand hit earnings.

Published: 2 February 2012 13:58 CET

Electrolux profits plunge amid weak demand

“The appliance market in the fourth quarter of 2011 remained very competitive. The headwinds of price pressure, higher raw-material costs and weak demand grew stronger as the year progressed,” chief executive Keith McLoughlin said in a statement.

He said these factors negatively impacted earnings by three billion kronor ($445 million).

Net profit for the full-year came in at 2.06 billion kronor, down from 3.99 billion a year earlier.

For the fourth quarter, net profit fell by 68 percent to 220 million kronor, far below the 476 million forecast by analysts surveyed by Dow Jones Newswires.

Electrolux’s share price was nonetheless up by 1.54 percent on a Stockholm stock exchange that was flat in midday trading.

The Swedish company is the the world’s second-biggest maker of household appliances behind US group Whirlpool.

“While we expect the trend going forward to shift in a more positive direction in the form of gradual improvements in prices, mix and lower costs, we do not anticipate that demand in mature markets will recover in the first half of 2012,” McLoughlin said.

“However, there could be a certain degree of improvement in the US market by the end of 2012, supported by a modest growth in the housing market,” he added.

The group said it expected demand in Europe to be stable or shrink slightly — by up to two percent — this year.

It also predicted rising costs for transport, which “makes it even more important to be successful with our price increases.”

For the full-year 2011, sales slipped by 4.4 percent to 101.6 billion kronor, but rose by three percent in the fourth quarter to 28.3 billion, which was higher than the 27.9 billion expected by analysts.

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Was Norway ill prepared for the Covid-19 pandemic?

Photo by Eirik Skarstein on Unsplash

The 450-page report was submitted to Prime Minister Erna Solberg by medical professor Stener Kvinnsland, who led the review.

The commission found that, generally, Norway had handled the pandemic well compared to the rest of Europe. That was in part due to citizens taking infection control measures on board.

“After a year of pandemic, Norway is among the countries in Europe with the lowest mortality and lowest economic impact. The authorities could not have succeeded if the population had not supported the infection control measures;” the report states.

However, the commission’s report also outlined that Norway did not properly prepare itself for the pandemic.

“The authorities knew that a pandemic was the most likely national crisis to have the most negative consequences. Nevertheless, they were not prepared when the extensive and serious Covid-19 pandemic came,” it said.

Prime Minister Erna Solberg said during an interview with the commission, conducted as part of its work, that the government did not have an infection control strategy of its own.

“We had a ‘we have to deal with a difficult situation’ strategy. We had to do everything we could to gain control and get the infection down. It was really only at the end of March (2020) that we found the more long-term strategy,” she told the commission.

Low stocks of personal protective equipment were another source of criticism in the report.

“The government knew that it would in all probability be difficult to obtain infection control equipment in the event of a pandemic. Nevertheless, the warehouses were almost empty,” Kvinnsland said at a press conference.

Norwegian health authorities were praised for the swiftness with which they implemented infection control measures. But the commission said that the decision should have been formally made by the government, rather than the Norwegian Directorate of Health.

READ MORE: Norway saw fewer hospital patients in 2020 despite pandemic

The implementation of restrictions in March 2020 was critiqued for failing to ensure that “infection control measures were in line with the constitution and human rights.”

One-fifth of municipalities in Norway lacked a functioning plan in the event of a pandemic according to the report, and the government did not provide enough support to municipalities.

“We believe that government paid too little attention to the municipalities. The municipalities were given much larger tasks than they could have prepared for,” Kvinnsland said.

The report was also critical of Norway’s lack of a plan for dealing with imported infections in autumn 2020.

“The government lacked a plan to deal with imported infections when there was a new wave of infections in Europe in the autumn of 2020,” the report found.

“When the government eased infection control measures towards the summer of 2020, they made many assessments individually. The government did not consider the sum of the reliefs and it had no plan to deal with increasing cross-border infection,” it added.

The report also concluded that Norway allowed itself to be too easily lobbied by business when deciding to ease border restrictions last summer.

The division of roles in handling aspects of the pandemic was scrutinised in the report. Here, the division of responsibilities between the Ministry of Health and Care Services, The Norwegian Directorate of Health and the Norwegian Institute of Public Health were unclear.

The prime minister has asked the commission to continue its work.

“We are not done with the pandemic yet. Therefore, it is natural that the commission submits a final report. There will also be topics where the learning points can only be drawn later,” Solberg said.

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