Drinks manufacturing giant Diageo has warned it expects to take a profit hit of up to £200m due to the impact of coronavirus, which has seen bars and restaurants close and events cancelled across Asia.
Diageo – the owner of Guinness, Johnnie Walker whisky and Smirnoff vodka – this morning said group organic sales could be down £225m to £325m in the fiscal year.
Operating profit is expected to drop between £140m to £200m during the period, after the outbreak led to events being postponed, a reduction in conferences and a fall in tourism.
In Greater China, the company said bars and restaurants have been shuttered and there was a “substantial reduction in banqueting”. Diageo said it expects consumption to pick up towards the end of the 2020 fiscal year.
The outbreak in other countries – particularly South Korea, Japan and Thailand – has led to “events being postponed, a reduction in conferences and banquets, and a drop in tourism which have all impacted on-trade consumption”.
The company said it expects to see gradual improvement throughout the fourth quarter.
Meanwhile, a drop in international air traffic has hurt sales, particularly in Asia, and the firm expects to see a weaker performance in its travel retail division for the rest of the financial year.
“We remain confident in the growth opportunities in our Greater China and Asia Pacific business. We will continue to invest behind our brands, ensuring we are strongly positioned for the expected recovery in consumer demand,” Diageo said.