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UPDATE 1-Elevator maker Kone says orders rebound in China
October 26, 2017 / 11:19 AM / 24 days ago

UPDATE 1-Elevator maker Kone says orders rebound in China

(Adds detail, background)

STOCKHOLM, Oct 26 (Reuters) - Elevator maker Kone said on Thursday its order bookings in China were growing again, though it still faced price pressures in the world’s biggest elevator market.

Soft demand and price pressure in China have weighed on Kone, the world’s biggest elevator maker after Otis, in recent quarters after Beijing introduced measures to cool a property boom.

The company reported its first year-on-year fall in earnings in 12 years in the first quarter, but said on Thursday that orders in China returned to growth in the third quarter and it expected the Chinese market for new equipment to be relatively stable for the full year, in terms of numbers of units ordered.

“However, we continue to see risk that the government restrictions in the Chinese residential market will have a negative impact on new equipment demand still during the final months of 2017 and the early part of 2018,” the Finnish company said in a statement.

It did not give details of its order growth in China.

It said its total operating profit fell to 307 million euros ($363 million) in the third quarter from 331 million a year ago, narrowly missing the 309 million forecast by a Reuters poll of analysts.

“Higher raw material prices, price pressure witnessed in our Chinese new equipment business and increased R&D and IT spend continued to burden our operating income in the third quarter,” the company said.

Kone maintained its forecast for full-year adjusted EBIT to be in a range of 1.2 billion-1.25 billion euros, and net sales to grow by 1-3 percent.

Order bookings at Kone totalled 1.74 billion euros in the quarter versus analysts’ expectations for 1.77 billion euros, unchanged on the year.

Kone shares initially fell on the results but recovered to trade 1.5 percent higher by 1031 GMT. ($1 = 0.8469 euros) (Reporting by Niklas Pollard; Editing by Johannes Hellstrom and Susan Fenton)

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