Sunday , April 18 2021

Profit erosion for Schindler in the first quarter



Zurich (AWP) – Higher costs for wages and raw materials reduced Schindler's net profit by 5% to 197 million Swiss francs in the first quarter. If the margins were under pressure, new orders and turnover increased.

Lucerne's lifts and escalators announced Friday a turnover of 4.48% (+ 5.5% in local currency) to 2.58 billion Swiss francs. New orders rose 5.2 percent to 2.97 billion, a hundred million more than expected. In local currencies, the increase reached 6.4%.

Compared to the AWP consensus, performance is mixed: sales are slightly above expectations, while net profits are lower. Operating profit (EBIT) decreased by 1.1% to 274 million, with a margin of marginal decline of 10.6% (11.4%). The executed copy remains "solid", according to the qualifications selected by the group in a press release.

All regions and all sectors of activity are growing. Revenues were reduced despite the negative impact of exchange rates and the high base for comparison with the first quarter of 2018.

For the whole year, Schindler still expects "above average market growth". The increase in sales in local currencies is expected between 4 and 6% (unchanged from previous forecasts).

Warning

However, the group warns that the slowdown of business is expected later this year due to political and economic uncertainties.

Analysts are concerned about the erosion of margins and rising production costs. The Zurich Cantonal Bank (BCG) gave a "little negative" rating, but still recommended to overcome the situation. Receiving the order and sales were stable.

Vontobel's comments go in the same direction. The Zurich facility also predicts slowdown throughout the year, due to the macroeconomic environment and the political context.

Baader Helvea points to "modest growth" in sales in most markets. One of the company's main competitors in Central Switzerland also reported more growth, the analyst notes, without specifying which of them.

Shindler's stock price fell 3.5% to 214,40 Swiss francs around 9,45, while SLI was 0,19%.

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