Rise in raw material costs hurt Electrolux’s profits

Post by The Commander on 28th April 2011 in

Rise in raw material costs hurt Electrolux’s profits

Increasing oil prices have helped to push down profits at Swedish-based domestic appliance manufacturer, Electrolux.

Net profit for the first quarter of 2011 fell to 457 million kronor ($75m), down from 911 million kronor the previous year, according to a report by BusinessWeek. 

In a statement, the company said it plans to implement "selective price increases" in Europe in order to help compensate for rising raw material costs, but admitted that it will take time for the measure to have an effect. This year Electrolux expects its raw material costs to increase by around 2 billion kronor.

Electrolux, which sells a wide range of domestic appliances from cookers to vacuum cleaners, also plans to improve its product mix in order to help combat rising costs.  

President and chief executive officer Keith McLoughlin said: "Our launch of new, innovative products under the AEG brand continues. The new products are an important part of our work to regain market shares, and at the same time strengthen our product mix."

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