Today Thursday, April 23, is a key day for the quarterly publications of several major international companies. And since this morning, a series of bad figures have been announced for the first quarter of 2020, enough to take the measure of the dramatic impact of the Covid-19 epidemic on economies.
This Thursday, April 22, shortly after 10:00 a.m., the Cac 40 went negative (-0.27% to 4,400 points).
And there was good reason for this: the catastrophic quarterly results of the biggest tenors of the stock market in the first quarter of 2020.
A black spring for Accor
The French hotel group Accor, Europe’s leading hotel group and the sixth largest worldwide, posted a 17% decline in revenue to €768 million in the first quarter. On a like-for-like basis, i.e. excluding the effects of changes in the scope of consolidation and exchange rates, the decline was 15.8%.
The decline is likely to continue, since Accor expects April and May to be “the most difficult” months of the year and the impact to be particularly heavy on its EBITDA.
These figures provide clear evidence that the hotel sector is being hit hard by the containment measures related to Covid-19.
Alcohol sales drop for Pernod Ricard
The wine and spirits sector is also far from being spared from the crisis. The French company Pernod Ricard, which had predicted that, affected by the confinements in China from the end of January, its annual operating profit would fall by around 20%, was not mistaken. This morning, it confirmed a sharp decline in its sales, to € 1.736 billion, down 14.5% on a like-for-like basis.
The group, which owns the Mumm champagne, Absolut vodka and Martell cognac brands, also announced the suspension of its share buyback programme, the balance of which amounted to 500 million euros, and the launch of a cost-cutting plan: “We are maintaining our strategic course while deploying a major action plan to reduce our costs and actively manage our cash flow“, stated Alexandre Ricard, the group’s CEO, in an official statement.
Falling profits for Daimler
The German car manufacturer Daimler also reported on Thursday a 78% drop, to 617 million euros, in its operating profit in the first quarter as well as a negative cash position of 2.3 billion euros from January to March due to the consequences of the coronavirus pandemic.
This dramatic decline is being felt in sales, turnover and operating profit and is affecting all its branches: Mercedes-Benz Cars, Mercedes-Benz Vans, Daimler Trucks and its bus division.
The German manufacturer warned, however, that “the impact of the pandemic on demand, supply chains and production cannot be assessed with the usual level of certainty and detail” and that the full first-quarter financial report is due to be published on 29 April.
This is a dark day then for large companies that are now, more than ever, considering all available options to overcome their current difficulties and revive their growth potential.
Featured Photo : © Accor / Facebook
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