Jan 27 Reuters Signify, the world39;s largest lighting maker, on Friday gave a more upbeat forecast for operating profitability for 2023, on the back of an improving situation in China.

Signify, the former lighting arm of Philips, had earlier this month cut its fullyear forecast for 2022 for both profit margin and sales growth, citing a steeperthanexpected China slowdown.

The company39;s shares were up 2.5 at 0834 GMT.

Signify said it expects operating profitability for 2023 to be in the range of 10.511.5, but did not give any outlook on sales, citing volatility in the current macroeconomic environment.

The COVID measures, specially in the fourth quarter, have been affecting us … on the market side, but also on the production side, Chief Executive Officer Eric Rondolat told reporters.

But if China is coming back to a normal level of economic activity, I think that39;s positive for us, he said.

The Eindhoven, Netherlandsbased company39;s earlier forecast was for margin on earnings before interest, taxes and amortisation EBITA of about 10 for the fourth quarter and fullyear 2022.

Rondolat also said the company39;s key priority in 2023 would be to improve profitability, as he expects container transport and raw material prices to continue to fall throughout the year.

We see the potential that we have to rebuild the gross margin and the profit in 2023, he added.

Citi analysts said the margin outlook was encouraging, but lack of sales guidance pointed to…