(Reuters) -Schindler, a Swiss company that makes elevators and escalators, cut its revenue forecast for the whole year on Friday. It said that the slowing Chinese economy, COVID-related lockdowns, supply chain problems, and high inflation were to blame.
The company now thinks that its sales will either go down by 2% or go up by 2% in 2022. It had previously said that growth would be anywhere from 1% to 6%.
“The problems with our supply chain, the worsening situation in China, and sharply rising inflation have all hurt our results in the first half of the year,” said Silvio Napoli, the CEO.
He also said that Schindler’s plans to make more money would take more time to show their full effects.
This year, Schindler has been hurt by a drop in demand for new equipment in China, which is a very important market, and by rising interest rates in the US and Europe, which slow down the construction market.
China’s real estate industry, which makes up about a third of the country’s gross domestic product (GDP), is in a crisis because a number of developers are not paying their debts and a growing number of homebuyers are not paying their mortgages on projects that have been put on hold.
About 18% of Schindler’s sales were made in China last year.
The group’s net profit for the second quarter was 152 million Swiss francs ($157 million), which is 37% less than the same time last year but still in line with what J.P. Morgan analysts had predicted.
Schindler thinks that its net profit will be between 620 and 660 million francs in 2022. This is less than the 881 million francs it made in 2021.
$1 is worth 0.9684 Swiss francs.
