stockholmelectrolux reported results for the second quarter on thursday heres what we watched net loss the swedish homeappliance manufacturer swung to a secondquarter net loss of 648 million swedish kronor 631 million from a profit of sek257 million as earnings were weighed by sek643 million provision significantly lower volumes due to weaker market demand currency headwinds labor cost and energy inflation a factset poll had seen net profit at sek 350 million disposals the company said it has started preparations for a potential divestment of zanussi and other noncore assets during the coming years that could raise around sek10 billion a divestment would include the production facilities in egypt which produce zanussibranded major appliances and production facilities for water heaters in egypt and south africa the brands and water heater category to be divested represented around 5 of group net sales in 2022 in the current challenging macro environment focus and strategic portfolio management are more important than ever said chief executive jonas samuelson further structural simplification and complexity reductions are also being evaluated cost inflation electrolux expects external factors to be negative for the year driven by raw material costs energy costs trade tariffs direct and indirect currency impact and labor cost inflation of over 2 in the second quarter electrolux said that raw material cost was neutral but currency deteriorated and it continued to face higher cost inflation from labor and energy yearoveryear the combined headwind from external factors was to a significant extent offset by price it added margins the adjusted operating margin was 16 in the second quarter from 17 the year beforethe groupwide cost reduction and north america turnaround program resulted in a positive yearoveryear impact on operating profit of around sek16 billion from cost efficiency and reduced innovation and marketing combined however the weak market demand environment with lower consumer purchasing power resulting in more consumers shifting to lower price points continued although price increases contributed somewhat positively in the quarter earnings promotions also increased significantly and electrolux now expects the net price effect to turn negative from the third quarter guidance electrolux expects demand for core appliances in 2023 to be negative for all regions having previously seen a neutral development in the asiapacific middle east and africa region the volumemix in 2023 is still expected to be a negative on earnings this year with pricing partially offsetting external factors its costreduction plan and north american turnaround program are now expected to have a positive earnings contribution of at least sek5 billion in 2023 from sek4 billionsek5 billion previously capital expenditure for the full year 2023 is now expected to be sek6 billion from sek6 billionsek7 billion previously