Schindler lifts 2023 revenue forecast on better supply chains, China sales

By Ozan Ergenay and Bartosz Dabrowski

(Reuters) -Swiss elevator maker Schindler on Friday posted a 65.1% increase in net profit, driven by efficiency gains, a stabilisation in supply chains and price increases, and slightly raised its 2023 revenue forecast.

Full-year net profit is expected to reach 860-900 million Swiss francs ($992.84-$1.04 billion) and revenue to grow 5-8% in local currencies, it said. The company previously forecast low single-digit revenue growth from last year’s 11.34 billion francs. Net profit in 2022 was 659 million francs.

Net profit in the April-June period came in at 251 million francs, beating analyst estimates of 197.7 million francs, according to a company-provided poll.

Revenue reached 2.93 billion Swiss francs, up 7.9% after last year’s results had been affected by COVID-19 lockdowns in China.

In reaction to the ripple effects from China’s troubled real estate market, Schindler already last year streamlined product offerings and increased prices and is now benefiting from its stabilising measures.

“Against weakening global markets and increasing foreign exchange pressure, we remained focused on delivering for our customers,” Chief Executive Silvio Napoli said in a statement.

Schindler said it also benefited from an easing of global supply chain disruptions at the turn of the year.

Its shares were seen up 2.9% in bank Julius Baer’s pre-market trade at 0610 GMT.

“We expect a beat and raise to drive outperformance today especially after the stock was weaker yesterday post Kone’s report” JP Morgan analyst Andrew Wilson said in a note.

Finnish rival Kone on Thursday missed forecasts for second-quarter orders due to weaker than expected demand in its key Chinese market, sending its shares down 4%.

The Chinese market makes up around 17% of Schindler sales, while Kone generates around a third of its sales in the country.

($1 = 0.8662 Swiss francs)