Switzerland-based Schindler Group warned first-half 2022 profits may shrink 20% and has issued a profit warning for the entire year as its China business slows, compounded by global construction delays and other issues. The warning came as the company announced first quarter results.
Regulatory curbs on borrowing have driven China’s property sector into a liquidity crisis, highlighted by China Evergrande Group, the world’s most indebted property firm. Schindler relies heavily on China, which accounts for about 14% of the company’s sales.
Chief Financial Officer Urs Scheidegger said the company was working on a strategic plan to close the margin gap with peers, which should be announced “in the summer by the latest.”
This month, Finnish rival Kone reported slightly weaker-than-expected fourth-quarter core earnings, warning that reduced liquidity in the Chinese property sector and rising supply chain costs could weigh on its 2022 profits.
Schindler’s fourth-quarter net profit fell 15% to 192 million Swiss francs (US$208 million) but still ahead of the 184 million francs analysts expected.
The company said it would propose an unchanged dividend of 4.00 Swiss francs per share.
- Reuters, with editing by Neal McGrath
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