Companies worldwide are already feeling the effects of deadly virus
Mastercard and United Airlines join growing list of firms saying sales are being hurt
Sydney — For big business, the impact of the new coronavirus epidemic is already being felt worldwide.
Mastercard and United Airlines are the latest companies to warn that sales and profit are being hurt as the epidemic spreads beyond its centre in China’s Hubei province. Growing outbreaks are emerging in other parts of Asia and in Europe.
The US credit-card network cut its revenue-growth forecast as the spread of infections puts off travellers. Chicago-based United scrapped its 2020 profit forecast, underscoring the unpredictable nature of the two-month-old health emergency.
With the spread of the outbreak raising questions over whether it will be declared a global pandemic, businesses around the world that are exposed to travel are clear targets.
Singapore Airlines on Tuesday pulled more flights from its schedule until the end of May, adding to a long list of airlines led by Cathay Pacific that are cutting capacity as demand craters.
Increasingly, though, the coronavirus has become a concern for any industry fed by a global supply chain.
In China, the biggest consumer market and a factory for the world, manufacturing facilities have closed and some of the biggest cities have been locked down. That has disrupted production, logistics and sales for businesses that churn out essentials, from Procter & Gamble in the US to Germany’s Adidas and Australian vitamins maker Blackmores.
The number of coronavirus cases in South Korea soared over the past week, rising from dozens to more than 800, making it the most-infected country outside China. Meanwhile, swathes of Italy have been locked down, and total cases worldwide have topped 80,000.
The World Health Organisation (WHO) called the increase in cases outside China “deeply concerning”, though stopped short of labelling the crisis a pandemic.
Either way, US consumer-goods company P&G late last week said sales and earnings will be affected amid lower store traffic in China and beyond, with travel retail also getting hurt. HP on February 24 flagged a “significant impact” to free cash flow in its second quarter because of production and manufacturing delays.
Even state-owned investment firms are not immune. Temasek in Singapore, where there have been 90 confirmed cases, said it is implementing a companywide wage freeze and asking senior management to take voluntary pay reductions for as long as a year.