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Lockmaker Assa Abloy misses Q4 profit forecast after housing market slows

Published 07/02/2024, 09:20
Updated 07/02/2024, 13:47
© Reuters. FILE PHOTO: An Assa Abloy lock is displayed in the shop in Riga, Latvia September 19, 2013.   REUTERS/Ints Kalnins/File Photo

By Elviira Luoma and Jesus Calero

(Reuters) -The world's biggest lockmaker Assa Abloy reported a smaller-than-expected rise in fourth-quarter operating profit on Wednesday, after a decline in residential markets slowed sales growth.

The Swedish group's quarterly operating profit, excluding items affecting comparability, increased 11% from a year earlier to 5.72 billion Swedish crowns ($545.5 million). Analysts polled by LSEG had expected a profit of 5.77 billion crowns.

Its shares fell 0.87% in afternoon trading.

The rival to Allegion and Stanley Black & Decker said its organic, or like-for-like, sales were flat in the fourth quarter. On a reported basis, sales increased by 12% to 36.97 billion crowns.

Assa, whose products include security doors, automated entrance solutions and electronic and mechanical locks under brands such as Yale, said organic sales fell in the Asia-Pacific and Europe, Middle East, India and Africa (EMEIA) regions.

The Americas region, where Assa acquired Spectrum Brands' Hardware and Home Improvement (HII) division last June, recorded 5% like-for-like growth driven by continued good demand in non-residential business.

Assa said the impact on its business from attacks on vessels in the Red Sea has been minimal.

"It's true that some of the container costs have increased and we had to reschedule our production schedule a little bit. But in the big picture again, small movement will not move the needle," Chief Executive Nico Delvaux said in an interview with Reuters.

Delvaux also said cost-cutting measures would continue.

"These cost-cutting measures, the manufacturing footprint programme and the one-offs that came mainly in Q3 and Q4, will remain as long as the market conditions remain challenging," he said.

© Reuters. FILE PHOTO: An Assa Abloy lock is displayed in the shop in Riga, Latvia September 19, 2013.   REUTERS/Ints Kalnins/File Photo

Assa said it planned to pay a dividend of 5.40 crowns per share for 2023, up from 4.80 crowns a year earlier and higher than the 5.17 crowns seen by analysts.

($1 = 10.4866 Swedish crowns)

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