June 16, 2020 / 7:39 AM / 2 months ago

Caterer DO & CO braces for tough year after first annual loss

VIENNA (Reuters) - Austrian airline and event catering group DO & CO (DOCO.VI) reported its first annual loss on Tuesday as demand slumped during the coronavirus pandemic and on start-up costs related to a contract with British Airways (ICAG.L).

DO & CO, which also operates restaurants, said it had taken restructuring measures in response to the pandemic and decided not to propose a dividend for its 2019/20 business year.

With around 70% of revenue coming from its airline business, the group said its 2020/21 financial year would be “considerably” affected by the crisis and it didn’t expect passenger demand to fully recover before 2023.

It posted a net loss of 15.6 million euros (£14 million) on 10% higher revenue of 935 million euros for the year to the end of March.

The company is currently building a 35,000 square metre kitchen at London’s Heathrow airport, from which it will provide catering and handling services on long- and short-haul flights for British Airways and other airlines from September.

However, it said it was evaluating the closure of some of its 32 kitchens located in 12 countries, where customers include Turkish Airlines, Lufthansa’s (LHAG.DE) Austrian Airlines and Cathay Pacific (0293.HK).

The group, which caters for soccer club Bayern Munich and operates Vienna’s famous Demel cafe, said its restauant business was picking up as coronavirus restrictions were lifted and there were also pleasing signs at its event catering and gourmet retail businesses.

It plans to open new food bars in coming months and launch a service for the pre-ordering and pick up of ready meals and ingredient boxes from central locations.

Do & Co shares, which have lost more than 40% this year, were up 3% by 0905 GMT, in line with Austria's blue-chip index .ATX.

Reporting by Kirsti Knolle; Editing by Michelle Martin, Kirsten Donovan

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