Credit bureaus hint which companies are taking the biggest hit from COVID-19
Credit bureaus warn coronavirus costs will hinder recovery for Australian businesses with a number of companies likely to flag headaches.
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Credit bureaus warn ongoing coronavirus costs will hinder recovery for major Australian businesses, with a number of companies likely to flag further headaches ahead of the annual general meeting season.
A report by CreditorWatch and CreditSource examining the financial impact of COVID-19 has revealed the health crisis is causing significant disruptions to major public companies.
The report highlights a number of major firms are adapting to operating changes, while others flounder from ongoing shutdown and restriction measures.
Looking at the performance of major companies listed on the Australian Securities Exchange, the report says ongoing associated costs to COVID-19 will dent businesses while the recovery timeline remains uncertain.
CreditorWatch chief executive Patrick Coghlan said while some companies had felt the pressures of the virus, others are experiencing sale increases of more than 40 per cent.
“Although many businesses are suffering, there are also clear winners,” he said.
“Innovative firms should continue to do well. But we don’t know how long the virus will last, whether there will be more lockdowns and how long government incentives will be in place for or what other stimulus may be introduced.”
In the mining sector, companies with a strong iron ore assets have enjoyed a surge in production amid increased demand from China, while thermal coal producers are suffering a profit slump.
According to the report, Fortescue Metals saw its profits lift 49 per cent due to the rise in iron ore demand, while coal miner Whitehaven Coal took an earnings hit due to lower purchases from its major buyers in India and Indonesia.
Commercial landlords are another sector greatly impacted by the pandemic, as lockdown measures continue to keep retail shops closed.
CreditSource chief executive Shavantha Mallawa said major shopping mall landlords such as Scentre Group, the owner of Westfield, had endured property revenue income falls of more than 15 per cent.
He also noted aviation and tourism activity will remain heavily suppressed while ongoing border restrictions continue.
CreditorWatch flagged buy now, pay later company Afterpay would likely see further adoption of its service while consumers remain vigilant about their spending habits, and could be beneficial for bricks and mortar retailers reopening for business.
“A lot of businesses are finding their entrepreneurial spirit, producing new goods, adapting their goods or embracing technology,” Mr Coghlan said.
Originally published as Credit bureaus hint which companies are taking the biggest hit from COVID-19