KONE’s Third Quarter Profit Below Expectations Due to China Slump

KONE will focus on modernizing and servicing existing lifts as it sees no end to China’s construction slump and has reported third-quarter profit below expectations, Reuters reports. China — the company’s main market — is in a property downturn with few signs of revival. KONE recently announced a new global strategy refocusing on modernization and service instead of selling equipment for new buildings. “We have 10% growth on our service sales. We are growing our orders on modernization by 20%. And the combination of the two for KONE represents 60% of our business,” CEO Philippe Delorme told the source. KONE has narrowed its 2024 margin outlook, expecting a full-year adjusted group operating profit margin of between 11.5% and 11.9%, from a previous upper limit of 12.2%. It also narrowed its sales growth outlook to 0–3% from 0–4% at comparable exchange rates. KONE reported a third-quarter adjusted operating profit of EUR319 million (US$344 million), up from EUR316 million ($US342 million) a year earlier, but below a mean forecast of EUR340 million ($US367 million).