Schindler cuts 2022 revenue guidance on China slowdown

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The company now expects 2022 revenue to come between a 2% decline and 2% growth. It had previously guided for growth in the range of 1% to 6%.

“The supply chain issues combined with the aggravated situation in China and sharply rising inflation have been weighing on our results in the first six months of the year,” Chief Executive Officer Silvio Napoli said.

He added that the full impact of Schindler’s profitability enhancing measures would take more time.

Schindler has been hit this year by falling demand for new equipment in the critical Chinese market, coupled with rising interest rates in the United States and Europe, which slow down the construction market.

China’s real estate sector, which is responsible for broadly one-third of its gross domestic product (GDP), is in crisis as a string of developers default on their debts and a growing number of homebuyers refuse to pay mortgages on stalled projects.

China accounted for around 18% of Schindler’s sales last year.

The group’s second-quarter net profit came in at 152 million Swiss francs ($157 million), down 37% from a year earlier but still in line with the consensus figure cited by J.P. Morgan analysts.

Schindler expects 2022 net profit to reach 620-660 million francs, below the 2021 figure of 881 million francs.

($1 = 0.9684 Swiss francs)

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