AUS
NZ
UK
CA
USA
IND
_06_04_2026_00_29_48_108019.jpg)
The gushing adrenaline jump on the roulette table that sent fervours among the tourists visiting Australia’s casino currently seems to be simmering down amidst the rising Coronavirus fears. The hysteria created concerning the novel Coronavirus appears to bring diverse activities to a standstill, especially if that concerns movements across mainland China.
Australia that has previously been basking in the glory of the rising Chinese economy seems to be currently enduring the hit by the deadly rise of the coronavirus. The investors and people in business impatiently waiting for the good news that would announce the slowdown of the epidemic is highly expected in the chaotic times.
However, while you stroll across the Australian streets wondering about any signs of viral deacceleration, you come across new accentuated numbers that surpass not only the previous cases but also crushes down your hope of very near-term closure of the epidemic.
Many of the Australian Stocks are struggling under the pressure of the uncertainty created in the market due to coronavirus. The travel industry appears to be hard-hit by the blow of the coronavirus that has resulted in the government’s travel ban. The ongoing travel restrictions on travellers from China pose a surmountable challenge for the visitor economy, which encompasses travel and other associated industries that directly or indirectly profits from visitor’s interaction.
Gaming industry often understood mainly in connection with the leisure activities seems to be inflicted by the impacts of the coronavirus. Also, as Macau regarded as the world’s lucrative casino destination shuts down, the gaming industry players in other parts of the world could forebode the impending crisis in their facilities.
Webjet fears Coronavirus impact on its Financial Performance
Recently on 19 February 2020, Webjet Limited (ASX:WEB), in its half-yearly report, highlighted the strong financial performance. The company, through the outstanding performance of its B2B portfolio, WebBeds experienced significant growth.
The group’s TTV for the half-year ending 31 December 2019 reached $2.3 billion accounting for the increase by 25% from the previous corresponding period. Likewise, the revenue for the group increased to $217.8 million, witnessing the growth by 24%. When comparing the 1H20 results against that of 1H19, while the group acknowledged the increase in EBITDA by 43%, WebBeds EBITDA rose by more than 80%.
WEB’s Key 1H20 Financial Highlights, Source: ASX
The strong financial performance of the group can be associated to its effective performance in the different foreign regions. A TTY growth of 23% YoY was experienced in China that serves as the key market in the Asia Pacific region. However, the movement restrictions across China along with the travel ban could prevent the tourists from utilising the travel services of the group.
John Guscic, WEB’s MD discussing on outlook and guidance for FY20, highlighted that the company had been witnessing the impact of the COVID-19 on bookings and TTY across all its businesses. The material slowdown in China Webjets has therefore estimated the reduction of between $7 to 15 million in 2H20 EBITDA. Furthermore, the material slowdown in China is having a subsequent impact in the Asia Pacific along with minor effects felt in Europe and AMEA regions.
The stock of WEB was trading at $13.540 per share, up by 0.148% (at AEDT 2:11 PM) on 21 February 2020. With the market capitalisation of $1.83 billion, the total outstanding shares of the company stood at ~135.6 million as on 21 February 2020. The stock has generated a total return of 4.97% and -0.29% in three months and six months, respectively.
The severity and duration of coronavirus would together impact Corporate Travel
Corporate Travel Management Limited (ASX:CTD), catering to the global travel solutions needs, presented its half-yearly results on 19 February 2020. The revenue for the company in the period ending December 2019 increased by 6% as the revenue rose from 2951.5 Million in 1H19 to 3,310 Million in 1H20. While the company’s TTV increased by 12%, the underlying EBITDA for 1H20 was found flat at $64.5m. Corporate travel recorded a decline in NPAT by 8% owing to software amortisation and higher effective tax rate. The company declared Half-year 50% franked dividend flat at 18 cents.
Source: ASX
The company considering the severity and duration of the novel Coronavirus tried to estimate the impact on its operations and revenue. While the assumed coronavirus effect is for all 2H20, the company considered the peak impact to last for two months in February/March 2020. CTD expected to witness the severity much high in Asia compared to the rest of the world as one-third of its Asian Transactions relate to China.
Notably, in the past six months, CTD stock price has slumped by 23.93%. During the trading session on 21 February 2020, CTD was trading at $15.955 up by 1.819% (at AEDT. The market capitalisation of the company stood at $1.71 billion.
Crown Resorts witness softer trading Conditions following the outbreak
The diverse travel and gaming related areas where Crown Resorts Limited (ASX:CWN) operate together create potential risks from the coronavirus. Apart from the resorts and projects, the company also owns Crown Aspinalls and Crown Digital that exposes the group to the casino and digital gaming business.
The group in its half-yearly results for the period closed 31 December 2019, reported the dwindling in its and EBITDA by 9% to stand at $381.3 million. For Crown Melbourne division, the increased labour and other cost led to the decline in the normalised operating margin from 28.1% to 26.2%. The EBITDA from Crown Digital that encompasses wagering and online social gaming operations recorded a considerable rise of 87.5%.
Crown Resorts owing to the Travel restrictions expressed ongoing softer trading conditions. The uncertainty created following the outbreak has generated a chaotic situation in the market, thereby putting the investors in a dilemma.
The CWN stock was trading at $11.745, down by 1.303% (at AEDT 2:38 PM) with $8.06 billion market capitalisation. While the company’s stock price has increased by 4.20% in the past six months, its YTD performance is down by 1.00%.
Bottomline
The travel and gaming companies have expressed concerns about the performance owing to the pandemic. The market uncertainty due to the health crisis is augmented by the travel restrictions that are resulting in fewer bookings and revenue post the epidemic. While the majority of the investors believe that it would be too early to comment on the overall impact on the travel and gaming stocks, the duration and severity of the epidemic would principally determine the overall financial performance of the shares in the upcoming period.
