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Despite Brexit uncertainty, Electrolux remains positive on Europe

Home appliance manufacturer Electrolux raised its 2016 outlook on European demand Wednesday, helped by strong growth seen in the region during its second quarter.

However, the U.K.'s vote to leave the European Union last month has pushed companies to find fixes for an eventual Brexit, with the Swedish firm highlighting concerns over the U.K.'s demand and its currency going forward.

"We're of course exposed to the British pound and of course we have to take actions to counter the weakness of the pound, and we're looking at doing that," Jonas Samuelson, chief executive at Electrolux, told CNBC Wednesday.

"In terms of demand, we have seen some concerns from the construction sector with some signs that they are pulling back a little bit. However overall, our business in the U.K. is still developing very well, so we're not overly concerned. There are some uncertainties and some negative developments there."

While the British pound has shown some signs of stabilizing after falling to a 31-year low just days after the Brexit vote, Electrolux's CEO said it was very hard to tell whether the pound would drop even lower. With this uncertainty in mind, Samuelson added that the company was now safeguarding itself against exposure to the British currency.

Changes in exchange rates overall continued to have a negative impact on the company's operating income during the quarter, however the CEO remained optimistic, saying he expected current rates to have more of a "neutral effect" during the second half of 2016.


Thomas Engstrom | Bloomberg | Getty Images

The comments come as the home appliance manufacturer posted a 77 percent increase in net profit for its second quarter on Wednesday, up at 1.08 billion Swedish crowns ($125.5 million), compared to 608 million crowns in the same period last year.

Most regions delivered a strong performance for the firm in general, however, demand for appliances in Latin America remained weak, with the firm expecting this weakness to continue in 2016.

The firm also raised its forecast for European market demand during 2016, expecting the Western region's demand to grow by 2 percent to 4 percent during 2016, and Eastern Europe to rise by 2 to 3 percent.

"We're very happy about our performance. We're growing in the key branded focus areas and the markets are supportive. Most European markets are growing in the quarter and we see that continuing into the second half."

Despite beating expectations with second quarter earnings, Electrolux was one of the worst performers on the pan-European STOXX 600, off 6 percent around 3.00 p.m. London time.

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