Electrolux warns of semiconductor shortages

STOCKHOLM: Swedish home appliance maker Electrolux warned Wednesday that a semiconductor shortage could crimp production and flagged rising raw material prices as it posted better-than-expected first quarter earnings.

Due to the pandemic, "consumers continued to spend more time at home using their appliances more intensively and allocating a larger share of their household budgets to home improvement projects," CEO Jonas Samuelson said in a statement.

For the period of January to March, net profit reached 1.56 billion Swedish kronor ($186 million, 154 million euros), far outpacing the analyst consensus forecast of 1 billion compiled by Factset.

Sales rose by nine percent to 29 billion, the company said, while analysts were expecting 27.6 billion.

The company also noted increasing costs, mainly for raw materials, but that it had been able to fully offset them via higher prices, allowing the profit margin to rise 7.9 percent.

However, Electrolux signalled that it too has been held back by the global shortage of semiconductors, which has notably seen automakers temporarily shut down factories.

"Despite producing at almost full capacity in the first quarter, we were not able to fully meet the strong market demand across all product categories," Samuelson said.

"The supply chain remained strained in many areas, especially for electronic components, certain plastics and logistics, and the situation can deteriorate further driven by the rebound in industrial activity globally," he added.

Looking forward, Samuelson said they expected demand to continue to stay strong.

"However, capacity and electronic component availability will remain constraining factors into the second half," he warned.