By Louis van Boxel-Woolf and Bartosz Dabrowski
(Reuters) -Lift and escalator maker Schindler reiterated its full-year revenue guidance for low single-digit percentage growth on Thursday, even as it cut expectations for new installations in China against a challenging backdrop.
Although Chinese installations outpaced the rest of Asia-Pacific in both units and value in the first quarter, Schindler said weakness in the country's construction activity would likely weigh on future orders.
It expects new installations in China to decline by more than 10% this year, compared to the 5% to 10% drop it had forecast in February.
Chinese construction starts by floorspace fell 27.8% in the first quarter compared to the same period last year, signalling continued tough conditions for the installation businesses of companies like Schindler.
But Schindler's relatively limited exposure to China meant that 2024 sales and profits would not be too impacted by conditions there, analyst Nick Housden of RBC Capital Markets told Reuters.
China made up just under 15% of the group's revenue last year.
Schindler's quarterly order intake fell 3.4% to 2.79 billion Swiss francs ($3.07 billion) on a reported basis, reflecting weak demand for new installations globally, it said. In local currencies, orders were up 2.5% from a year earlier.
Analysts had expected order intake of 2.77 billion francs, a consensus poll compiled by Vara Research showed.
First-quarter revenue fell 4.4% on a reported basis to 2.67 billion francs, but was up 1.1% in local currencies as growth in the modernisation and service businesses offset a decline in new installations, Schindler said.
Earnings before interest and tax rose 10.9% to 292 million francs, beating a consensus estimate of 278 million francs. That reflected operational improvements and pricing discipline, it said.
Schindler's EBIT margin was 10.9% in the quarter, and it reiterated a margin target of 11% for 2024.
($1 = 0.9101 Swiss francs)