Diageo PLC (LON:DGE) shares fell on Wednesday as the drinks giant predicted that it could suffer a £200mln hit to profits in its current year as the coronavirus outbreak shuts down bars and restaurants.
The maker of Guinness and Johnnie Walker whisky said the virus, which has infected around 80,000 people and killed over 2,700 across the world, has resulted in the postponement of events as well as “the closure of many hospitality and retail outlets”, particularly in China.
READ: Diageo a 'buy' for its strong US and low Asia exposure - Kepler Cheuvreux
Coronavirus outbreaks in other countries such as South Korea, Japan and Thailand, have also led to a drop in tourism and consumption of the company’s products, as well as a “significant reduction in international passenger traffic”, the firm said.
As a result, Diageo estimated that the outbreak will result in a “negative impact” of between £225-£325mln on its organic net sales and £140-£200mln on organic operating profit, although the timing and pace of recovery from the virus could affect these ranges.
The group added that it was still “confident” in growth opportunities for China and the Asia Pacific region and was “strongly positioned for the expected recovery in consumer demand”.
In late morning trade, Diageo shares were 1.5% lower at 2,917p.
-- Adds share price --