Carnage hits world markets

JSE-LISTED companies have stepped up information to shareholders on how the disruption caused by the spreading coronavirus would affect their financials.

The carnage, which has hit markets across the globe, saw companies take a beating this week as stocks tumbled and fears over its spread tightened its grip.

Liberty Holdings chief executive David Munro said the insurer was watching the developments closely.

“It has already impacted global trade and it could result in a spike in mortality for insurers,” Munro said.

Grindrod Shipping Holdings chief executive Martyn Wade said the virus had disrupted demand and trading patterns for both the drybulk and product tanker markets.

Grindrod reported a $35.4 million (R544m) loss for the year to end December, impacted by $14.3m of non-cash impairment charges.

“We look to the positive fundamentals of both the drybulk and product tanker sectors which are expected to take effect once the current crisis dissipates,” he said.

Motus Holdings said car sales in China tumbled 92 percent as the country extended the New Year holiday in a bid to contain the spread of the virus.

Chief executive Osman Arbeen said the slowdown was likely to remain for the remainder of the year.

This week, the world’s largest brewer, Anheuser- Busch (AB) Inbev, said the spread of the virus had affected sales in the first two months despite the increase in global volume growth on premiumisation and management initiatives.

The group said the outbreak resulted in estimated lost revenue of about $285m and earnings before interest, tax, depreciation and amortisation (Ebitda) of about $170m in China.

Chief executive Carlos Britto said shipments in China had already started to slow in that market at the end of last year, leading the brewer to lower its guidance.

Britto said while the group was betting on a rebound in the later part of this year the lower end of the 2020 forecast of 2 percent to 5 percent would be the weakest growth in four years.

Troubled retailer Steinhoff International said in an operational update for the quarter to end December that it was looking at alternative ways to source goods that typically came from Asia.

Steinhoff said while it was widely expected the outbreak and spread might lead to sourcing and other challenges, it was not yet possible to determine accurately any future impact on performance.

Bid Corporation (Bidcorp) said the coronavirus was likely to hurt the food services firm’s results in the second half of the year.

Chief executive Bernard Berson said while the extent of the fallout remained unclear, the group was bracing itself for the worst.

“The recent political and social upheaval in some markets combined with the unfolding coronavirus pandemic is likely to impact growth prospects into the second half of the year though the severity is impossible to predict at this stage.”

Kumba Iron Ore said market uncertainty and the commodity industry were weakening confidence.

Chief executive Themba Mkhwanazi said the group had devised a plan to buffer the effect on its sales as China was the world’s largest consumer of iron ore.

“The strategy around the coronavirus and the slowdown in China is really around how we manage our stockpiles both at the sites and at the ports,” Mkhwanazi said.

“We are engaging with our customers and are also looking at our marketing outside China.”