STOCKHOLM (Reuters) - Swedish home appliance maker Electrolux (ELUXb.ST) said on Sunday it now saw a considerable risk of a “material” financial hit in the first six months of 2020 due to the rapid global spread of the new coronavirus.
The company, which warned on January 31 of a possible substantial hit to results should the effects from the virus outbreak linger long enough, said on Sunday that that risk was now much higher, adding its previously given outlook was no longer valid.
“Given the rapid spread of the coronavirus, impacting markets where Electrolux has a significant presence in terms of production and sales, the company believes the risks related to this have increased materially,” it said in a statement.
Electrolux, which has a big manufacturing base in Italy, the country worst hit by the coronavirus outside of China, said some of the main risks included supply chain disruptions, government countermeasures and changing consumer behavior.
“Given the fluid situation, it is not at this point possible to predict the duration or scope of the health crisis, and therefore the full potential impact,” it said.
Electrolux said it was preparing to reduce its production pace in Italy in the coming week, and said it would continuously assess further needs for production adjustments and mitigating activities.
Commenting on China, where Electrolux sources large volumes of finished products and components, it said there had been delivery delays and higher logistics costs in the first quarter, but noted that the situation had improved.
Reporting by Johannes Hellstrom; editing by Johan Ahlander