SSP Group forecasts February revenue hit of up to £12m due to COVID-19
The group observed sharp declines in air passenger numbers in Asia Pacific.
SSP Group has warned shareholders that its overall revenue in February will be reduced by up to £12 million with a corresponding dip in operating profit of up to £5 million due to the worldwide impact of the novel coronavirus now known as COVID-19.
In a trading update, the operator forecasted that February sales across the Asia Pacific region, which accounts for 8% of the group’s revenues will be approximately 50% lower year-on-year. (YoY) along with the impact of COVID-19 in the Middle East and India.
The three markets make up the group’s Rest of the World segment, which accounts for 14% of its revenue.
“In China, we have seen sharp declines in both domestic and international air passenger numbers, which are currently running c. 90% lower YoY. In Hong Kong, passenger numbers are c. 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. Elsewhere, we have also seen some impact at our airports in Australia, as well as at major travel hubs in the Middle East and India, although to date this has been less severe,” the group noted.
In response to the sharp fall in sales in China and across the Asia Pacific region, the group said it has been working with our clients to “maintain appropriate service levels” whilst cutting costs by temporarily closing units and reducing operating hours.
In contrast, trading in the UK, Continental Europe and North America, which together account for approximately 86% of their revenue, has been in line with expectations.
“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. We will continue to take all the necessary action as appropriate. Our strategy remains unchanged, and we continue to be well placed to benefit from the significant structural growth opportunities in our markets over the medium term and to create ongoing value for our shareholders,” the group added.
