Elevator maker Kone hikes outlook as Q1 profit, orders beat forecasts

Published : 1 year ago, on 26/04/2023

Elevator maker Kone hikes outlook as Q1 profit, orders beat forecasts

(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)