March 15, 2020 / 11:15 PM / 20 days ago

New Zealand's corporate world hit by coronavirus outbreak

(Reuters) - The fast-spreading coronavirus has shaken the corporate world in New Zealand, with a growing number of companies suspending their earnings outlooks, and others reeling from the economic unknowns facing them.

The country’s central bank stunned markets by slashing its official cash rate early on Monday morning. It said the impact from the virus on the economy was, and would remain, significant.

Shortly afterwards and adding to the list of firms forced to suspend their earnings forecasts, Auckland International Airport (AIA.NZ) and Serko Ltd (SKO.NZ) did so, pointing to the stringent border controls imposed by New Zealand over the weekend.

The extreme measures, which Prime Minister Jacinda Ardern said were needed to prevent the rapid spread of the virus, requires all incoming travelers, including New Zealand citizens, to self-isolate for two weeks starting from midnight on Sunday.

There are so far eight confirmed cases of the coronavirus in New Zealand.

Companies highly exposed to travel and tourism have been hit hard.

Air New Zealand (AIR.NZ), which withdrew its full-year guidance last week, further slashed capacity on Monday and said it was looking to lay off some permanent staff. Its directors also agreed to a 15% pay cut until the end of the year.

“These are unprecedented times,” said the airline’s chief executive officer, Greg Foran.

Tourism Holdings Ltd (THL.NZ) said there “are too many uncertainties” to keep its profit forecast. Investor Good Spirits Hospitality (GSH.NZ) withdrew its 2020 earnings guidance on Monday.

The world’s biggest dairy exporter, Fonterra (FSF.NZ) (FCG.NZ) will report half-year results on Wednesday and its outlook will be closely watched.

The New Zealand Exchange said companies must “promptly” disclose if the coronavirus was having any material financial or operating impact.

The government plans to announce a business continuity plan on Tuesday with a fiscal package to provide both targeted and broad-based economic stimulus.

Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Peter Cooney

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