Kone Quarterly Profit Rises on Asian, European Gains

Kone Oyj, the Finnish company that supplies elevators to the London underground and the Grand Mosque in Mecca, said second-quarter profit rose 19 percent on sales of new equipment sales in Asia and Europe.
Net income increased to 98.7 million euros ($157 million), from 82.9 million euros a year earlier, Helsinki-based Kone said today in a statement. Sales advanced 14 percent to 1.14 billion euros.
Revenue gained 25 percent in Asia and 15 percent in Europe, Middle East and Africa, more than compensating for a falling dollar and a North American housing slowdown that has spread to other construction markets. Kone is building lifts for the Marina Bay Sands resort in Singapore, the Shanghai International Finance Center, and the Delhi Metro.
``The results, especially in Europe, Middle East and Africa are encouraging, given all the comments on weak construction markets,'' said Maria Ivek, a Zurich-based Credit Suisse analyst with an ``outperform'' rating on Kone.
Kone closed down 7.2 percent at 22.04 euros in the Finnish capital, mirroring declines at construction companies and building-material suppliers. The company has lost 8 percent this year, giving it a market value of 5.6 billion euros.
Analysts surveyed by Bloomberg predicted a profit of 101 million euros on sales of 1.09 billion euros. Earnings per share rose to 39 cents from 33 cents last year.
Modernization, Maintenance
Kone has approximately 12 percent of the world elevator and escalator market, competing with ThyssenKrupp AG, United Technologies' Otis Elevator Co. unit, Switzerland's Schindler AG and Mitsubishi Elevator Europe BV.
Chief Executive Officer Matti Alahuhta has purchased small maintenance companies, most recently in France and Spain, to expand in maintenance and modernization, which are less cyclical than new equipment sales. Service and revamps accounted for 52 percent of sales in the quarter.
``In the U.S., the commercial segment no longer compensated for the slowdown in the residential segment,'' the company said in the statement. ``In the United Kingdom, the residential market continued to weaken, while the major project market was active.''
New contracts increased 16 percent, boosting the order book to 3.8 billion euros, as the North American real estate slowdown spread from housing to other building. Alahuhta said the company will grow more than 10 percent this year, compared with previous guidance of ``about'' 10 percent.
``It's quite exceptional that they were able to increase new equipment so much, and yet their operating profit is also increasing, said Credit Suisse's Ivek. ``Given that it's generally assumed new equipment has lower margins than service.''
Kone is controlled by Chairman Antti Herlin, who has more than 60 percent of votes according to the company's Web site. Herlin is the fourth generation of owners of Kone.

Kone chosen to supply escalators for new M&S Store in Malvern

Kone has been chosen to supply escalators to Marks & Spencer's new store in Malvern - which reportedly features a number of initiatives in line with M&S's 100-point, five-year 'eco' plan.
In accordance with M&S's plans to make all UK operations carbon neutral by 2012, Kone said that it has equipped the new store with energy-efficient escalators.
According to Kone, the energy-efficient escalators adjust its speed based on usage, increase equipment lifetime and can reduce energy consumption by up to 30%.
In addition to the energy-efficient escalators, the store will have lights with motion sensors, self-closing water taps and other features to save energy and water, Kone said.
Andy Jones, national sales manager of escalators at Kone, said: "Kone has a long and successful relationship with M&S in the UK. We are delighted to be their partner in this new ecological initiative, and with our environmentally friendly technology, we have a great chance to contribute to the new store's carbon-neutral targets."

Sustainability Leader KONE Announces Price Increase

KONE Inc., an industry leading
provider of People Flow(TM) Solutions, announced today that they are
increasing pricing in Canada and the United States by approximately five
percent (5%) on select Elevator and Escalator solutions for new construction
and modernization. As with many of our customers, KONE is facing higher
commodity and energy prices.
While KONE understands the concerns for rising cost in building
construction and refurbishment, they continue to focus on delivering solutions
that provide overall life-cycle cost savings for the customer. With KONE's
industry leading Eco-efficient(TM) products and services, customers will see
the benefit from lower energy use, reduced construction material needs and the
elimination of hydraulic oil.
Additionally, KONE takes sustainability within their operations very
seriously. For example, maximizing eco-efficiency through route planning for
the maintenance vehicle fleet drastically reduces fuel consumption. "We're
committed to being a sustainable, green company, and will continue our efforts
to raise productivity and maximize eco-efficiency," says Vance Tang, EVP and
Area Director for KONE Americas. "Our goal is to minimize increased costs for
various commodities and energy and continue to deliver best in class products
and services."
KONE was the first company in the vertical transportation industry to
invent and introduce the innovative Machine Room-Less (MRL) elevator solution.
Since its introduction in 1996, the efficient operation of over 200,000
EcoSpace(TM) and MonoSpace(R) solutions has saved as much energy as produced
by a typical 250 megawatt power plant. The measure of sustainability of the
MRL solution since 1996 is also comparable to saving 2,000,000 barrels of oil
and reducing the CO2 emissions of 100,000 cars.
The price increase will take effect on July 15, 2008.

Kone Centre will 'most definitely' move forward, developer says

Plans to build the 18-story Kone Centre in downtown Moline will “most definitely” move forward, developer Rodney Blackwell said Wednesday.Aldermen doubted the project’s future when Blackwell failed to appear at a Committee-of-the-Whole meeting Tuesday night to answer questions about his finances and give an update.Blackwell said he planned to issue a joint statement on the project’s status with Kone, the elevator company that’s expected to move its headquarters into the proposed building at 17th Street and River Drive, and Renew Moline, either Wednesday or today. No statement was received Wednesday.Blackwell would not detail what the statement will address but said it will be “very positive.” He referred further questions until after the statement is released.Ray Forsythe, Moline’s economic development director, said Blackwell contacted Lew Steinbrecher, the city administrator, Wednesday morning and plans to meet with city staff and attend next week’s City Council meeting where the agreement could be revisited.“Rodney has committed to getting the information that we need,” he said. “We’ll be getting together by the end of the week to review everything.”A Kone official said the company is still committed to moving into the new tower. “We’re working directly with Rodney and we’re continuing to go forward with the project,” Kurt Stepaniak, Kone’s senior vice president of law and business development, said Wednesday afternoon.The City Council took no action Tuesday on an agreement with Blackwell and Financial District Properties K.P. that would give the developer a 90 percent rebate on new property taxes generated by the project, which equals $17.5 million over 23 years.The city plans to create a new tax increment financing district for the area around the proposed tower, replacing an old district that expires in 2021, Forsythe said. The project needs a 23-year TIF district to support the rebate.In December, the city council agreed to sell $7.5 million in bonds to fund a loan to Blackwell, managing principal of Financial District Properties K.P., so he could purchase downtown buildings owned by Kone. Kone will then lease space in Blackwell’s tower. Kone will lease back its property from Blackwell while the new tower is being built.Alderwoman Dorothy Armstrong, Ward 7, said Blackwell called her Wednesday morning and said he was going to sign the lease with Kone Wednesday. The discussion left Armstrong feeling more optimistic about the project’s future.“You get those leases signed and let’s move forward,” Armstrong remarked.Armstrong wants to see a breakdown of Blackwell’s finances before a final decision is made by the council.“We’ve got to see the pro forma for that piece of property downtown or you don’t get it done,” Armstrong said. “If we get the pro forma and lease agreement, chances are we’ll pass it.”Armstrong said Blackwell told her he didn’t attend Tuesday’s meeting because he didn’t know the agreement was going to be discussed.

Kone heirs dominate Finnish shareholders' ranking

Finnish business weekly Arvopaperi reported Thursday that four of the country's top ten portfolios of Helsinki-listed shares were held by members of the Herlin family, of lift and escalator maker Kone fame.

Two top ten positions are taken up by descendants of Eero Erkko, the founder of Helsingin Sanomat, the country's biggest broadsheet.
According to Arvopaperi's survey, 25 Finns have portfolios worth more than 100 million euros, up from eight five years ago.

Antti Herlin, the chairman of Kone, tops the list with a 1.42-billion-euro portfolio, the only one in the top ten to have risen in value last year.

KONE To Supply Elevators For Netherlands' Biggest Governmental Building

KONE has secured an order to supply all elevators for the new Ministry of Justice and Internal Affairs building in Den Haag, Netherlands. Located in the centre of the city, the building will be the government's biggest in the Netherlands."We are very pleased that Ballast Nedam and BAM have chosen KONE for this impressive project," says Noud Veeger, KONE EVP and Area Director for Central and North Europe. "It is one of the most significant high-rise deals for KONE in the Netherlands and the tenants of the building will benefit from KONE's Eco-efficient(TM) solutions."The building complex will comprise two 140-meter towers and will be equipped with 25 elevators. Four of them will be KONE JumpLiftTM elevators, which boost the buildings' vertical transportation capacity during construction time by growing with the building. Installation of the equipment will begin in 2008 and is estimated to be completed in 2012.The contractors for the project are Ballast Nedam and BAM and the architect is Hans Kollhoff Architecten. A 125-meter high residential tower called "De Kroon" (the Crown) will be built next to the building and will also be equipped with KONE elevators.

88 Kone Elevators More To The Marina Bay Sands Project In Singapore

After securing an order for the Marina Bay SandsTM Integrated Resort's three soaring 56-storey hotel towers in Singapore last February, Kone won a second order for this impressive project. The order comprises 88 elevators operating in the development's convention and exhibition center, retail space, ArtScience Museum, two theatres and casino. With an approximate value of EUR 13 million, the second order raised the total monetary contract value for this project to over EUR 40 million. The two orders also make Kone the largest vertical transportation supplier in the project. "This uniquely prestigious and demanding project highlights Kone's capability to provide a full range of solutions from luxury high-rise to heavy freight use, all powered by the Kone EcoDisc® hoisting machine", says Pekka Kemppainen, Kone EVP and Area Director for the Asia-Pacific region. "Thanks to Kone's EcoDisc® technology, we are able to provide the leading Eco-efficient solutions on the market today". With an impressive architecture designed by the visionary Moshe Safdie, the Marina Bay Sands will deliver world-class experiences in meetings and conventions, dining, shopping and entertainment under one roof. The Marina Bay Sands is being developed by Marina Bay Sands Pte. Ltd., a subsidiary of Las Vegas Sands Corp, Asia's leading developer of premium integrated resorts and the Meetings, Incentives, Conventions and Exhibitions industry leader of the United States.

Kone wins a second order for project in Singapore

After securing an order for the Marina Bay Sands Integrated Resort’s three soaring 56-storey hotel towers in Singapore last February, Finnish lift and escalator maker Kone won a second order for this impressive project. The order comprises 88 elevators operating in the development's convention and exhibition center, retail space, ArtScience Museum, two theatres and casino. With an approximate value of EUR 13 million, the second order raised the total monetary contract value for this project to over EUR 40 million. The two orders also make Kone the largest vertical transportation supplier in the project.With an impressive architecture designed by the visionary Moshe Safdie, the Marina Bay Sands will deliver world-class experiences in meetings and conventions, dining, shopping and entertainment under one roof. The Marina Bay Sands is being developed by Marina Bay Sands Pte. Ltd., a subsidiary of Las Vegas Sands Corp., Asia's leading developer of premium integrated resorts and the Meetings, Incentives, Conventions and Exhibitions (MICE) industry leader of the United States.