Big business sounds alarm over virus

£200m hit to Diageo profits Rio warns on China demand Chevron UK HQ evacuated

THE threat posed by coronavirus to businesses of all types was laid bare yesterday by a string of multinational firms.

Drinks giant Diageo, miner Rio Tinto and major retailer SSP became the latest big names to sound the alarm about the damage the deadly disease could inflict.

The grim updates, which followed 48 hours of carnage on global stock markets, came as oil firm Chevron told its 300 staff in London to work from home after an employee came down with flu symptoms.

The shares selloff, and string of warnings from major companies, highlighted the farreaching impact of the deadly virus on businesses.

The direst warning came from Diageo, which said it expects up to £200m to be wiped off profits this year in Asia as bars and restaurants are shut and drinkers stay at home.

The FTSE 100 stalwart, whose brands include Johnnie Walker whisky, Gordon’s gin, Smirnoff and Guinness, said demand has been knocked across China, where the outbreak started, as bars and restaurants have closed. Sales across the rest of AsiaPacific are also lower amid a fall in conferences and banquets.

Diageo said business has been hit as the spread of the covid19 virus led to many flights to and from China and elsewhere in Asia being cancelled. It now expects the coronavirus to knock off between £225m and £325m from sales, and between £140m and £200m of operating profit.

It said: ‘It is difficult to predict the duration and extent of any further spread of the covid19 outbreak both in and outside of Asia.’

Despite posting its biggest annual profit in eight years, Rio Tinto warned the coronavirus epidemic could trigger a slump in demand for iron ore from China.

The world’s secondbiggest miner by market value is a major supplier to China. But with many areas in lockdown, and workers ordered to stay at home, production of steel has taken a hit, which bosses fear will reduce its gargantuan appetite for iron ore.

JeanSebastien Jacques, the firm’s chief executive, said: ‘The next six months could bring us some challenges. Today our order books are full but we are likely to see some shortterm impacts.’

Meanwhile, the company behind railway station and airport chains including Upper Crust and Caffe Ritazza said it is braced for a £5m hit to its profits this month as sales across Asia have tanked.

SSP, which also operates Starbucks and Burger King outlets, has seen a 90pc fall in custom at Chinese airports since January, with Hong Kong travellers down 70pc compared with a year ago.

Singapore, Thailand, Taiwan and the Philippines also showed reduced sales, with numbers down between 25pc and 30pc.

The succession of grim updates came as it emerged that 300 oil workers at Chevron in London’s Canary Wharf had been sent home after an employee developed flulike symptoms.

The unnamed employee had returned from a country hit by a coronavirus outbreak. Staff are working at home while tests are carried out on the worker.