Konecranes withdraws 2020 financial guidance due to COVID-19 and updates demand outlook
Konecranes revises its demand outlook and withdraws its financial guidance for full-year 2020. Konecranes expects COVID-19 to have an impact on demand for its products and services, particularly in the first half of the year, but as the situation is evolving quickly it is too early to make reasoned estimates that quantify this impact.
Due to the pandemic, countries around the world have imposed extensive restrictions on the daily conduct of people and businesses. As a result, many of Konecranes’ customers are limiting access to their premises, affecting Konecranes’ ability to complete the installation of new equipment and perform certain service operations.
Konecranes’ own operations are also impacted by the significant and increasing worldwide measures to contain the pandemic.
Beyond the virus, Konecranes expects the adjusted EBITA margin to be affected by an estimated cost overrun of EUR 18 million related to the execution of a port crane project in the US. This charge will be booked in Q1 2020.
The new demand outlook is:
Due to COVID-19, the demand environment across our customer segments and regions is deteriorating.
The new financial guidance is:
Due to the rapidly evolving situation as a result of the COVID-19, Konecranes considers that it is too early to make reasoned estimates or provide financial guidance for 2020.
The earlier demand outlook issued on February 6, 2020:
Within the industrial customer segments, the demand environment in Europe continues to weaken but at a slower rate. The demand environment in North America is relatively stable overall and remains on a higher level compared to Europe. Asia Pacific is showing early signs of improving demand conditions.
Despite its recent decline, global container throughput continues on a good level. Although there is hesitation in the decision-making among some port customers, the longer-term prospects for orders related to container handling remain good overall.
The earlier financial guidance issued on February 6, 2020:
Konecranes expects sales in full-year 2020 to increase 7-10 per cent year-on-year, including MHE-Demag.
Konecranes expects the adjusted EBITA margin to improve in full-year 2020 compared to full-year 2019.
In full-year 2019, the Group’s sales were EUR 3,326.9 million and the adjusted EBITA margin was 8.3 per cent.
Konecranes plans to provide more information in conjunction with its January-March Interim report on April 29. Konecranes intends to provide its guidance for full-year 2020 once the visibility improves and a more stable estimate can be made.