Schindler expects China business to contract in 2022 on construction delays

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Schindler expects China business to contract in 2022 on construction delays

Swiss elevator and escalator manufacturer Schindler said it expects its China business to contract in 2022 due to construction delays, material cost inflation and supply chain disruptions, after reporting lower quarterly earnings.

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The company's fourth-quarter net profit came in at 192 million Swiss francs ($208 million), 15per cent below last year's result but beating analysts' estimates for 184 million francs.

"Growth in China lost momentum in the second half of the year as the market absorbed the impact of the issues affecting the largest real estate developers," the company said in a statement on Wednesday.

Regulatory curbs on borrowing have driven China's property sector into a liquidity crisis, highlighted by China Evergrande Group, the world's most indebted property firm.

China makes up 14per cent of Schindler's sales.

Schindler said it expects its full-year revenue to grow between 1per cent and 6per cent, adding that the first half of 2022 should bring slow revenue growth and a significant drop in profitability.

The Swiss company's sales for the October-December period came in at 2.95 billion francs, below the 2.97 billion francs expected by analysts in a company-provided poll.