Elevator maker Kone orders miss forecasts on weak China demand

(Reuters) -Finnish elevator maker Kone's second-quarter orders missed market forecasts on Thursday due to weaker than expected demand in its key Chinese market, sending its shares down 4%.

Although supply chain disruptions have eased since the end of China's strict COVID-19 lockdowns, low construction activity in the country contines to affect orders for new elevators and escalators.

Kone's order intake fell 12.8% to 2.28 billion euros ($2.6 billion) in the April-June period, below analysts' average estimate of 2.42 billion in a poll provided by the company.

"Following a promising start to the year, consumer confidence weakened causing activity in China's property market to soften during the second quarter," CEO Henrik Ehrnroot said in an earnings statement.

The company, which makes around a third of its sales in China, said it expected new equipment orders in the country to decline by between 10% and 15% this year, down from its earlier estimate of close to a 10% drop.

Kone expects its 2023 sales to grow by between 3% and 6% at comparable exchange rates and its adjusted operating profit (EBIT) margin to come in between 11.0% and 12.0%. It had previously forecast annual sales "somewhat above" the prior year's level.

Adjusted EBIT jumped 58.6% to 332.0 million euros ($372.2 million) in the quarter, beating analysts' estimate of 298.2 million.

Shares of Kone's Swiss rival Schindler, which will report quarterly results on Friday, were down 2.4%. ($1 = 0.8931 euros)

(Reporting by Elviira Luoma in Gdansk; Editing by Milla Nissi and David Holmes)