Forklift truck manufacturer KION earned less than expected in the fourth quarter, although free cash flow was better than expected.
KION reported fourth-quarter consolidated earnings of 83 million euros, compared with analyst estimates of 118 million euros. For the full year, the company reported a consolidated profit of 306 million euros compared to expected 341 million euros.
KION justified this with higher one-off and special effects as well as higher financial expenses in the fourth quarter of 2023. However, the dividend proposal should be in line with market expectations.
KION paid a dividend of just EUR 0.19 for 2022, compared to EUR 1.50 per share in the previous year. Earnings after taxes and third parties fell by 83 percent to 98 million euros in 2022.
The free cash flow for the 2023 financial year now reached 715 (consensus: 668) million euros. According to KION, the remaining key figures for the fourth quarter of 2023 and the financial year are expected to be within the forecast or market expectations and will be published on February 29, 2024. All figures provided are preliminary and unaudited.
KION shares lower according to numbers – Jefferies remains optimistic
Investors initially had difficulty classifying KION’s business figures on Thursday afternoon. The share price fell sharply after publication and was subsequently volatile, with the price mostly remaining in the red. Most recently, the discount was 1.7 percent. After the price rally from the beginning of November to the end of January, the air is now out.
The forklift manufacturer and warehouse technology specialist earned significantly less than expected at the end of 2023 due to special effects and higher financial expenses. The operating result (EBIT) of the Supply Chain Solutions (SCS) segment, excluding special items, also fell short of market expectations. Meanwhile, free cash flow was surprisingly strong in 2023.
The publication is actually not as big an event as it seems, wrote analyst Lucas Ferhani from Jefferies in an initial assessment. He has already pointed out possible headwinds for the operating result (EBIT) in the SCS segment. In addition, this should now create a tailwind for 2024 because fewer old projects need to be processed.
A lower surplus results from non-recurring expenses and higher financial expenses due to higher interest rates, the expert continued. The free cash flow, which was better than expected, helped to further reduce debt. Ferhani sees price weaknesses as buying opportunities.
FRANKFURT (Dow Jones / dpa-AFX)
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