STOCKHOLM (Reuters) – Electrolux stock had its worst day in the markets since 2011 on Thursday, after Europe’s biggest home appliance maker posted a second-quarter loss as consumers shifted to cheaper goods and residential construction slowed.
On the Stockholm Stock Exchange, the Electrolux title fell by 16.19% at 9:21 GMT and should experience its worst day for 12 years.
The Swedish group posted organic sales down 8% as volumes declined significantly due to continued weak demand.
“The weak market demand environment, with declining consumer purchasing power, increasingly shifting to lower-priced products, continued into the second quarter,” chief executive Jonas Samuelson said in a statement.
“The slowdown in residential construction and renovation activity has led to a significant drop in demand in the fitted kitchen category, which has impacted mainly Europe,” he added.
Electrolux said in a separate statement that it has begun preparing for the potential divestiture of Zanussi and other non-core brands in the coming years.
The group estimated the total value of the potential disposal of all these assets combined at around 10 billion crowns.
The price appears to be a bargain but it appears to match the amount settled for these assets in the past, Kepler Cheuvreux analyst Johan Eliason commented in a note.
The company announced an operating loss of 124 million Swedish crowns (10.77 million euros) in the second quarter, against a profit of 560 million crowns the previous year.
(Report Anna Ringstrom and Izabela Niemiec, Augustin Turpin, edited by Kate Entringer)
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