Fosun International, the owner of Club Med resort chain, has told investors to expect up to a 76 percent slide in earnings for the first six months this year as the coronavirus pandemic crushed its tourism-related business.
The group is expected to generate RMB 1.8 billion to 2 billion (US$285 million) of earnings in the first half, compared with RMB 7.61 billion in the same period in 2019, it said in an exchange filing later Friday. The profit warning was based on a preliminary assessment of its management accounts.
The slide follows an impairment to its assets amid the global economic slowdown caused by the viral outbreak and restrictions on travels and social gatherings that clipped its tourism-related businesses. China’s economy posted a historic slump in the first quarter amid lockdowns that froze factories across the nation to contain the outbreak.
The Covid-19 pandemic has accelerated the company’s industry operations transformation, chairman Guo Guangchang said in the filing. Fosun has been pressing ahead to capture the opportunities arising from post-pandemic rebound in global consumption demand, he added.
Fosun Tourism Group, an 81 per cent-owned unit that holds its investment in Club Med and Atlantis Sanya, is expected to incur up to RMB 1 billion of losses, Fosun added, versus a RMB 490 million profit a year earlier, it added.
Fosun International has declined 17 per cent in Hong Kong this year, while Fosun Tourism slumped 37 per cent.
“Fosun Tourism Group continues to control cost and strives to promote business recovery,” the company said in the announcement released Friday night. “Currently, the Company’s financial position remains solid with ample liquidity and diversified financing channels to cope with future business needs.”
Read original article