By Dominic Chopping
STOCKHOLM–Sweden’s SKF AB reported higher-than-expected fourth-quarter net profit but cautioned that it expects supply-chain constraints and higher costs to continue.
The Swedish ball-bearing maker said the second half of 2021 saw increasing challenges in the form of supply-chain constraints and cost inflation.
During the fourth quarter, the company said it worked hard to mitigate the evolving cost inflation, which has continued to accelerate and in total it was able to compensate for about SEK700 million of the SEK1.66 billion cost increase.
SKF is implementing further broad-based price increases and continuing its focus on cost efficiency, in anticipation of continued supply-chain challenges and cost inflation during the new year.
“Looking into the first quarter of 2022, we estimate a low single-digit organic sales growth,” Chief Executive Rickard Gustafson said.
“Industrial is expected to grow while Automotive is expected to decline. For the full year 2022, we expect an organic sales growth of about 5%-10%.”
Its fourth-quarter net profit rose to 1.71 billion kronor ($185.9 million) from SEK1.53 billion a year earlier. Sales rose 7.2% to SEK20.99 billion.
Analysts polled by FactSet had expected net profit of SEK1.52 billion on sales of SEK20.04 billion.
It proposed a SEK7.00 dividend.
Write to Dominic Chopping at [email protected]