Sweden-based bearings manufacturer SKF reported its 2020 first quarter financial results on Thursday, showing that sales were notably down year-over-year as impacts from the COVID-19 pandemic accelerated already-lowered industrial demand that had gripped the industrial supply sector throughout the second half of 2019.
The company posted Q1 total sales of $2.0 billion, down 5.6 percent year-over-year, with organic sales down approximately 9 percent. Operating profit fell 14.7 percent to $230 million.
SKF said that during the last two weeks of March, when precautionary and government-forced closures of businesses across North America ramped up, company sales were down 25 percent from a year earlier.
Q1 sales were down 10 percent year-over-year in Asia, down 9 percent in Europe, down 12 percent in North America and up almost 4 percent in Latin America.
SKF's Industrial business saw organic sales fall almost 7 percent year-over-year, while the company's Automotive business had a 13 percent organic decline.
The company noted that its factories in India and Southeast Asia have been closed in accordance with government guidelines, while some SKF factories in Italy have also been closed, with exceptions for those supplying critical industries. SKF factories in most other countries have remained operational, albeit at a lower capacity, taking lower demand levels into account.
"We are also taking steps to mitigate the financial impact of the situation. This includes closure of sites, reducing costs and number of employees and increasing flexibility within the workforce," said Alrik Danielson, SKF president and CEO. "These are difficult but necessary steps that we need to take, in a responsible manner, to protect the business and make sure we have the foundations in place from which to emerge from this crisis as an even stronger SKF."