SSP warns of slump in Feb sales on coronavirus impact
By Frank Prenesti
Date: Wednesday 26 Feb 2020
(Sharecast News) - UK travel food company SSP Group warned February sales across the Asia Pacific would slump by 50% year on year as air passenger numbers fell due to the the coronavirus.
SSP, which collects 8% of its revenue from the region, said overall February group revenue was forecast to fall by ?10m - ?12m, with a cut in operating profit of around ?4m - ?5m.
"In China we have seen sharp declines in both domestic and international air passenger numbers, which are currently running 90% lower year on year (YOY)," SSP said in a statement ahead of its annual shareholders meeting on Wednesday.
"In Hong Kong passenger numbers are 70% lower YOY and across a number of our other Asia Pacific countries, including Singapore, Thailand, Taiwan and the Philippines, passenger numbers are between 25% and 30% lower YOY."
The company added that it had also seen some impact at airports in Australia, as well as at major travel hubs in the Middle East and India, although to date this had been less severe.
The outbreak has cause the cancellation of flights worldwide as new cases are reported, with the US warning of a pandemic and Italy locking down several towns in the northern region of Lombardy.
The company also said it was working with its clients to maintain appropriate service levels in response to the sharp fall in sales and was trying to cut costs, including the temporary closure of units and reduced operating hours. Last year the company said it was being hit by the grounding of Boeing's 737 MAX jets.
"Clearly the duration of the COVID-19 virus and its impact on global travel is uncertain at this stage, as are its consequences for our financial performance for the full year," SSP said.
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