Swedish home appliance maker Electrolux AB said Wednesday its net profit fell by 50 percent in the first quarter due to unfavorable currency exchange rates, price pressure and increased raw-material costs.
The company, based in Stockholm, said net profit for the period dropped to 457 million kronor ($75 million) from 911 million kronor a year earlier.
Revenue for the quarter fell by 6.7 percent to 23.4 billion kronor. The company said demand was "stable" in Europe and North America, but that increased raw-material costs and continued pressure on prices weighed on results.
"The prices of some of our most important raw materials continue to increase, especially plastics. We expect our costs for raw materials to increase in 2011 by about 2 billion kronor compared to the previous year," President and CEO Keith McLoughlin said in a statement. "Our ambition is to gradually compensate for the increase in costs through price increases, improvements in product mix and cost savings."
McLoughlin was the head of Electrolux's North American headquarters when it moved from Augusta to Charlotte in 2010. The company maintains a customer service center in Augusta.
He said Electrolux plans to increase prices in North America in the second quarter.
The company will implement selective price hikes in Europe as well, but McLoughlin said it could take time before the increases will give effect.
Electrolux said it expects market demand for appliances in Europe and North America to grow by around 2 percent and 3-5 percent respectively in 2011.