May 6, 2020 / 7:09 AM / 25 days ago

UPDATE 1-Electrolux Pro sees steep sales drop as pandemic hits

(Adds background, detail, CEO comment)

STOCKHOLM, May 6 (Reuters) - Commercial kitchen and laundry equipment maker Electrolux Professional reported a steep drop in quarterly sales and profits on Wednesday, due to the impact of the coronavirus on demand from hotels and restaurants.

A big hit to earnings from the virus had been flagged by the company, which has its operational headquarters and two of its twelve manufacturing plants in Italy, one of the countries hardest hit by the pandemic.

The company, which was listed in March after being spun off from home appliance maker Electrolux, said first-quarter sales fell 13.7% organically to 2.09 billion Swedish crowns, but added it had seen a 25% drop in March.

“The general market uncertainty is significant,” CEO Alberto Zanata said in a statement, adding the company’s short-term focus was on mitigating the sharp decline in demand, with cost-cutting implemented and investments re-evaluated.

The pandemic and the widespread lockdown of countries has severely hit the hospitality industry, including hotels and restaurants, which accounts for about half of Electrolux Pro’s group sales.

The company said that sales to institutions as well as in the laundry business had held up better.

It said that all its factories were currently operational, albeit with reduced production.

First-quarter operating profit dropped to 205 million crowns ($20.88 million) from 301 million a year earlier. ($1 = 9.8175 Swedish crowns) (Reporting by Johannes Hellstrom, editing by Helena Soderpalm and Louise Heavens)

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