By Dominic Chopping
STOCKHOLM–Swedish ball-bearing maker SKF posted lower-than-expected net profit, weighed by restructuring costs, and cautioned that sales are expected to fall in the first quarter.
SKF said Wednesday that its fourth-quarter net profit fell to 623 million Swedish kronor ($59.8 million) from SEK893 million a year earlier, while sales fell 3.6% to SEK24.44 billion.
Analysts polled by FactSet had expected net profit of SEK1.52 billion on sales of SEK24.99 billion.
SKF said earnings were hit by SEK1 billion of costs related to restructuring, factory closures and cost reduction activities, currency devaluation in Argentina and impairments due to the consolidation of factories.
Customer demand in all of its regions declined during the quarter due to the economic slowdown, partially offset by effective price and mix management.
In 2024, SKF will focus on implementing its strategic initiatives, including optimizing the supply chain and footprint, managing and restructuring its portfolio, and strengthening its position within sustainability and low-friction products and services, though it expects continued market volatility and geopolitical uncertainty, it said.
“Looking into the first quarter of 2024, we expect a mid-single-digit organic sales decline. For the full year, we expect a low single-digit organic sales decline, compared to 2023.”
SKF lifted its dividend to SEK7.50, from SEK7.00 last year.
Write to Dominic Chopping at [email protected]
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