Companies Verkkokauppa.com issued a profit warning, underlying the effects of the Ukrainian war

Consumer electronics chain Verkkokauppa.com has lowered its earnings guidance for 2022.

In its new earnings guidance, the company expects its turnover in 2022 to be between EUR 530 and 590 million. This is 50-60 million less than the company estimated in connection with the financial statements in February.

The company expects the operating result to be between EUR 12 and 19 million, compared to EUR 19–25 million earlier in February. In 2021, the operating result was EUR 20.4 million.

The company justifies the earnings warning with the slowdown in consumer demand accelerated by the war in Ukraine and the halving of the export business due to the war in Ukraine.

The company The export business in 2021 accounted for about 7 percent of the company’s net sales, of which Russia accounts for about half. At the beginning of the year, Verkkokauppa.com had estimated that the export business would gradually recover.

However, after Russia invaded Ukraine, Verkkokauppa.com decided to stop all sales to Russia. Now the company does not expect the export business to recover this year.

In addition to halving exports, the earnings warning is explained by the slowdown in consumer demand and business, according to Verkkokauppa.com. According to the company, the expected slowdown in economic growth and accelerating inflation have further weakened household confidence in their own finances.

The company states that, according to a study by the Finnish Business Research Institute Etla, the growth in demand for private consumption and consumer durables will slow down during the year.

New The guidance includes the E-ville acquisition to be completed in early April. The impact of the acquired E-ville businesses on Verkkokauppa.com’s net sales in 2022 is estimated to be approximately EUR 5-8 million.

According to Verkkokauppa.com, E-ville will be integrated into the company’s figures from the beginning of the second quarter.