Husqvarna posts record profit, braced for more component shortages
STOCKHOLM, July 16 (Reuters) - Swedish gardening power tools group Husqvarna said on Friday demand remained strong after a record second-quarter operating profit, but added it was braced for more component shortages due to global supply chain disruptions.
The world's biggest maker of products ranging from trimmers to irrigation systems has benefited from the stay-at-home trend due to COVID-19, posting record profits already for 2020 and the first quarter of 2021.
Second-quarter operating profit was up 14% from a year earlier to 2.66 billion crowns ($307 million), beating market expectations.
"We delivered a record second quarter with strengthened market positions and strong performance in all divisions and main regions," Husqvarna said. "The customer interest for gardening products increased and the construction industry market continued to rebound."
Organic sales growth was 14%, with robotic lawn mowers and other battery-powered products up 27%.
Chief Executive Henric Andersson told Reuters consumer demand remained strong in July while demand from the construction industry kept recovering.
Husqvarna said supply shortages had held back production to some extent during the second quarter.
"We need to be prepared for this situation staying with us for quite some time. It's important that we make as good preparations as possible also for the next season when it comes to lawn and garden products," Andersson said in an interview.
The company is in anticipation stocking up as much as possible on key components and products.
Andersson flagged that sales in the second half of the year may lag the exceptionally high levels of 2020 despite strong consumer demand and a backlog going into the period.
"We are going to meet some extremely challenging comparisons in the second half. At the same time we have very good momentum. It will be a big challenge to do better than we did last year," he said.
The rival to Black & Decker and Honda Motor does the bulk of business towards the end of the first quarter and in the second, ahead of and during the peak gardening season in the northern hemisphere.
($1 = 8.6590 Swedish crowns) (Reporting by Anna Ringstrom; editing by Niklas Pollard and David Evans)
