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Elevator maker Kone hikes outlook as Q1 profit, orders beat forecasts
Global Banking & Finance Review®
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(Reuters) -Finnish elevator maker Kone raised its 2023 sales outlook on Wednesday after its first-quarter profit beat market expectations supported by strong demand in its modernization
(Reuters) -Finnish elevator maker Kone raised its 2023 sales outlook on Wednesday after its first-quarter profit beat market expectations supported by strong demand in its modernization business.
Kone shares traded around 4% higher at 1041 GMT.
The Helsinki-listed company sees full-year sales “somewhat above” 2022 levels at comparable exchange rates. It had previously guided for 2023 sales in line with last year’s.
Kone said it still expects construction activity in China, which makes up about 30% of its total sales, to start recovering towards the end of the first half of 2023.
Global supply chain disruptions eased at the turn of the year, aided by the end of aggressive COVID-19 lockdowns in China.
Kone’s adjusted operating profit rose 23.1% to 241.9 million euros ($267.18 million) in the first quarter, ahead of analysts’ estimate of 221.6 million euros in a company-provided poll.
“Order momentum was solid considering the market backdrop,” CEO Henrik Ehrnroot said in an earnings statement.
Kone’s order intake fell 6.6% in the quarter to 2.26 billion euros, but exceeded the 2.14 billion euros expected by analysts.
Orders for new equipment were weighed down by low activity in Kone’s main market China, where property developers’ access to financing remained constrained in the quarter, Ehrnroot said.
Kone expects the new equipment market in China to decline “close to” 10% this year. It had earlier forecast a decline of “somewhat over” 10%.
Meanwhile, its services business delivered “yet another excellent quarter”, Ehrnroot said.
($1 = 0.9054 euros)
(Reporting by Greta Rosen Fondahn and Elviira Luoma in Gdansk; Editing by Milla Nissi, Alexandra Hudson)
Operating profit is the profit a company makes from its core business operations, excluding any income derived from non-operating activities such as investments or sales of assets.
Order intake refers to the total value of orders received by a company within a specific period, indicating demand for its products or services.
Modernization refers to the process of updating and improving existing systems, processes, or products to enhance efficiency, effectiveness, and competitiveness.
Supply chain disruptions are interruptions in the flow of goods and services, often caused by factors such as natural disasters, economic shifts, or logistical challenges.
Market recovery refers to the process through which a market rebounds from a downturn, characterized by increasing demand, sales, and overall economic activity.
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