Profits rise to new record at Schindler
Swiss elevator and escalator maker Schindler has recorded a 27.4 per cent rise in net profit for 2006 thanks to strong growth in its core business.
The company benefited from heightened demand in emerging markets in Asia and the Middle East for installation if high-rise buildings and the launch of new elevator systems in Europe.
Net profit rose to SFr511 million ($412.1 million). Besides growth in new markets, the consolidation of Finnish company GNT Holding – acquired by Schindler subsidiary ALSO – and the sale of real estate worth SFr41 million boosted the bottom line.
Operating revenue exceeded SFr10 billion for the first time, reaching SFr11.106 billion, an increase of 25.2 per cent. This was boosted by foreign exchange rates, which added another SFr177 million to revenue according to the group.
Sales in the elevators and escalators division rose 13 per cent to SFr8.417 billion.
However, market reaction was not enthusiastic, with the registered share price falling by 4.85 per cent to SFr80.40 at the close of trading on the Zurich stock exchange.
"These results are somewhat disappointing on the surface, and it looks as if the company has had difficulties in working down an abnormally large order increase," said Helvea analyst Volkan Goecmen in a note.
Schindler competes with Germany's ThyssenKrupp, Otis of the United States and Kone of Finland on the world market.
The Swiss firm, these three companies and Japan's Mitsubishi Electric, were fined a total of €992 million (SFr1.6 billion) by the European Commission last week for fixing prices and carving up markets. It is the biggest cartel penalty in European Union history.
Schindler has already announced that it will appeal its individual fine of €144 million for price fixing.
But the company remains optimistic for the year ahead despite the penalty.
"Excluding the EU fine and any unforeseeable events, it is anticipated that Schindler will report a net profit of approximately SFr530 million for the financial year 2007," the firm said in a statement.
"This corresponds to an increase of around 12 per cent compared with the net profit for 2006 before the real estate gain."
swissinfo with agencies
Schindler figures 2006:
Operating revenue: SFr11.106 billion (+25.2%)
Orders received: SFr11.72 billion (+24.1%)
EBIT: SFr726 million (+14.5%)
Net profit: SFr511 million (+27.4%)
Cashflow: SFr623 million (+27.1%)
Personnel: 43,679 (+8.2%)
The Schindler Group is the world number one escalator manufacturer and the second largest elevator supplier.
The group is the leading European company in both sectors.
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