March 9, 2020 / 12:37 PM / 3 months ago

Kone shares supported by China production ramp-up

March 9 (Reuters) - Shares in Finnish elevator maker Kone outperformed a falling market after the company said it has ramped up production in the key Chinese market, and said its January outlook from 2020 includes the impact of the coronavirus.

Kone shares fell 2.3% lower while the Helsinki index was down 6.6%.

Kone said it has gradually increased production at its Chinese factories since the second week of February, and has reached “a good capacity”.

“The level of activity at Kone’s manufacturing sites and its suppliers has recovered fast, but there continue to be restrictions on the movement of people across the country and this affects our logistics and deliveries for the time being,” it said.

Kone said the new equipment business in China - which accounts for around 80% of its business there, was most impacted by the virus. Kone made around 30% of its 2019 sales in China.

“Coronavirus is expected to have a significant impact on Kone’s Q1 sales and results especially due to lower new equipment deliveries in China and extra costs related to, for example, safety actions, logistics etc,” Kone said.

Kone said it took into account the uncertainty related to the coronavirus outbreak when providing the 2020 business outlook. In late January Kone forecast 0-6% sales growth in 2020, with adjusted operating profit at 1.25-1.4 billion euros.

Reporting by Tarmo Virki, editing by Louise Heavens

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