March 23, 2020 / 10:42 AM / 2 months ago

UPDATE 1-Liftmaker Kone slashes business outlook due to coronavirus

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HELSINKI, March 23 (Reuters) - Finnish liftmaker Kone has downgraded its business outlook for this year due to the coronavirus outbreak, it said on Monday.

“Kone now estimates that in 2020, its sales will decline or be stable at best at comparable exchange rates,” the company said in a statement, adding its adjusted EBIT margin is now expected to decline somewhat or be stable at best.

Kone had previously estimated its sales to grow by 0-6% in 2020 at comparable exchange rates and an adjusted EBIT of 1.25-1.4 billion euros.

“Should the broad and strict government measures continue to impact Kone’s operations well into the second half of 2020, Kone’s sales are expected to decline by 5-10%,” the company warned.

Kone said measures to contain the COVID-19 outbreak in different countries had resulted in closing down construction sites, limiting manufacturing operations and limiting maintenance activities.

“In Q1, the restrictions have been the most severe in China, but there Kone has already seen significant recovery after the loosening of the restrictions since the end of February. In the rest of the world, the measures are currently increasing significantly,” the company said.

Kone said it expects the restrictions to hit new equipment and modernisation sales in particular, but its maintenance business less so.

Its ability to deliver had remained overall on a good level and it said it expects to come out of the demanding situation “in a position of strength”. (Reporting by Anne Kauranen; editing by Catherine Evans and Jason Neely)

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