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The health of any economy is mostly sensitive to the macro and microeconomic events and play a vital role in the development of the country. If we look at the current scenario, the negative effects of the coronavirus are increasing by every passing day. The death toll from the spread of the virus is escalating by the day. As a result, equity markets are facing their worst times ever. If we talk about Australian markets, the benchmark index S&P/ASX200 has lost 10.88% and 14.28% over the last five days and 52-weeks, respectively.
Moreover, COVID-19 has forced the companies to either change or suspend their guidance. In the below article, we will be looking at three companies, which have provided corporate updates related to COVID-19 outbreak.
Estia Health Limited
Health Care company Estia Health Limited (ASX: EHE) is involved in the provisioning of services in residential aged care homes in Australia. The company recently notified the market with the update on the impact of coronavirus and outlined the following:
- On 17th March 2020 Estia Health Limited, through a release, has suspended its guidance for FY20 following the escalating uncertainty surrounding the potential future impact of coronavirus (or COVID-19). However, the company’s 69 homes have not witnessed a single case of COVID-19 among its residents or employees.
- As of now, the company is not able to provide clarity on the impact the evolving situation might have on future occupancy, revenues and costs throughout its 69 homes.
- Also, at the time, the company has not provided any clear guidance on the size of the projected impact on earnings for the remaining FY20, considering the dynamic and uncertain nature of COVID-19.
- Moreover, its key element of strategy continues to be disciplined capital management. Its strong balance sheet would enable the company to experience greater flexibility and depth of resources for meeting the challenges that the crisis may present.
- As at 13th March 2020, the net debt balance of the company stood at around $106 million along with undrawn and committed facilities amounting to ~$216 million. At the end of the same day, its net RAD balance stood at $827 million, including amounts due under probate.
During 1H FY20, the company has continued the practice of disciplined approach for making an investment in new capacity, improving the amenity of its current homes as well as identifying appropriate divestments. It invested an amount of $46.3 million in new homes, enhancements and improvements at existing homes and sustainability initiatives.
In order to appease the shareholders, EHE announced a 100% franked interim dividend of 5.4 cents per share (cps). This reflects a payout ratio of around 100% of Profit After Tax for the period. EHE will be paying the half-year dividend on 27th March 2020 with the record date of 2nd March 2020.
The stock of EHE closed at $1.180 with a fall of 7.812% as on 17th March 2020 with a market capitalization of $334.19 million while the total shares outstanding of EHE stood at 261.09 million. The stock made a high and low of $2.990 and $1.110 during last 52 weeks. The stock of EHE has generated a return of -48.59% and -49.80% during the last three-months and six-months, respectively.
Crown Resorts Limited
Crown Resorts Limited (ASX: CWN) is known as an international casino and gaming entity, which is having businesses and investments in key international markets. CWN has recently given effect to a policy covering numerous measures for social distancing at its entertainment complex at Crown Melbourne, post consultation with Government of Victoria. These measures include the following:
- CWN has deactivated every second electronic table game and gaming machine. Measures also include creating distance between seated tables games, which also includes no standing players
- The company has limited the number of players to 5 at each stand-up table game. Moreover, it has limited the number of people to 450 in banqueting, conference and individual food & beverage facilities. All these measures were effective from 16th March 2020.
- In another update, the company has implemented the equivalent social distancing policy at its Crown Perth entertainment complex, which is effective from 17th March 2020.
It has recently appointed Alan McGregor to the position of Chief Financial Officer of the company. For the 1H FY20, the company reported normalized EBITDA amounting to $381.3 million reflecting a fall of 9.0% with respect to the prior corresponding period. The company has announced a 25% franked interim dividend of 30 cps, which is payable on 3rd April 2020.
The stock of CWN closed at $7.160 with a fall of 1.648% as on 17th March 2020 with a market capitalization of $4.93 billion while the total shares outstanding of CWN stands at 677.16 million. The stock made a high and low of $14.370 and $7.010 during last 52 weeks. The stock of Crown Resorts Limited has generated returns of -41.10% and -41.24% during the last three-months and six-months, respectively.
Coca-Cola Amatil Limited
Coca-Cola Amatil Limited (ASX: CCL) is involved in the manufacturing, distribution and marketing of beverages. CCL officially got listed on Australian Stock Exchange in 1970. Recently, the company through a release dated 17th March 2020 has suspended its previously provided guidance because of significant uncertainty with respect to the duration and impact of the COVID-19 pandemic and also the effects consequent to the bushfires in Australia. The guidance included the expected EPS growth in mid-single digits in 2020 as well as in the mid- term.
For the full year ended 31st December 2019, the company reported a rise of 6.7% in its Group trading revenue. Its Ongoing earnings before interest and tax stood at $639.3 million with an increase of 0.8%, and ongoing net profit after tax (NPAT) amounted to $393.9 million with a rise of 1.4% compared to the pcp.
The Papua New Guinea & Indonesia segments managed to deliver double-digit volume and revenue growth as well as robust growth in EBIT. Investments and excellent execution in marketing have helped the Indonesia segment to attain strong revenue and volume growth. PNG reported strong double-digit volume, revenue and EBIT growth with the redressal of prior operational issues. Alcohol & Coffee have continued to report double-digit EBIT growth.
The stock of CCL closed at $10.01 with a fall of 0.1% as on 17th March 2020 with a market capitalization of $7.25 billion while the total shares outstanding of CCL stands at 724 million. The stock made a high and low of $13.18 and $8.23 during last 52 weeks. The stock of CCL has generated returns of -9.89% and -8.83% during the last three-months and six-months, respectively.
