Electrolux reinstates dividend as earnings recover from pandemic blow

FILE PHOTO: The Electrolux logo is seen during the IFA Electronics show in Berlin, Germany September 4, 2014. REUTERS/Hannibal Hanschke/File Photo

STOCKHOLM (Reuters) - Swedish home appliance maker Electrolux ELUXb.ST said on Friday it would propose reinstating dividends after a recovery in earnings and cash flows during the third quarter.

Europe’s biggest home appliance maker, whose sales and earnings were hard hit earlier this year during the height of the pandemic, said in a statement it had since seen as strong recovery which has continued through the third quarter.

“Electrolux estimates that the negative impact initially seen related to the pandemic will largely be recovered in the operating profit for the nine-month period ending September 30, including a strong improvement in cash flow,” it said.

Shares of the company rose 3.4% in early Friday trading.

The group said it was now proposing a 7 crowns per share dividend to be decided at an extraordinary general meeting on Nov. 3. It had initially proposed a 8.50 crown per share payout for 2019, but the proposal was withdrawn in March due to the pandemic.

Electrolux, which rivals the likes of U.S. Whirlpool WHR.N, said the recovery had been boosted by pent-up demand and government stimulus programmes impacting consumer spending patterns.

The company cautioned that visibility into the fourth quarter remained limited, “but at present, Electrolux anticipates financial performance to gradually normalize”, it added.

Reporting by Johannes Hellstrom; editing by Niklas Pollard