Photo: Andrew Medichini, AP
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The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Monday related to the global economy, the work place and the spread of the virus.
GOVERNMENTS & CENTRAL BANKS: National economies hammered by the pandemic are coming back on line to varying degrees, largely based on how recently peak infections arrived.
— The Czech Republic is allowing smaller stores to reopen in its latest phased return to normalcy. Stores up to 2,500 sq. meters (26,900 sq. feet) can operate, with social distancing measures in place. Three Czech plants of Skoda Auto that belong to Volkswagen renewed production on Monday.
— Greece will announce detailed plans to ease pandemic-related restrictions Tuesday. Stelios Petsas, a government spokesman, said Monday that hair salons and barbershops will be included in the first stage of reopening businesses when restrictions begin to ease on May 4.
— Switzerland is allowing hair salons, tattoo parlors, veterinarians’ offices and garden shops to reopen as part of a multi-tiered plan. Social distancing is still mandated.
ENERGY: Crude price have crashed almost 80% since the beginning of the year and thousands of oilfield workers have lost jobs. On Monday, contract driller Diamond Offshore filed for bankruptcy protection.
— CNX Midstream Partners is increasing its retained cash flow by reducing distribution 80% and reducing this year’s planned capital expenditures by 16%. The company said in a regulatory filing that it still expect to continue to generate significant free cash flow this year from its 100% fixed fee business.
HOTELS: The lodging industry has been carved out by the arrival of coronavirus and are in desperate need of cash.
— The occupancy rate at InterContinental Hotels that remain open are in the low to mid 20% range. The company said in a regulatory filing Monday that about 10% of its U.S. hotels are closed, while approximately 50% are closed in the Europe, Middle East, Africa and Asia region. In China, 12 of its 470 hotels are closed.
— A French hotel executive predicts his business will remain “catastrophic” for the rest of this year and is counting on government help to survive the virus crisis.
Serge Cachan, president of the Astotel chain of Paris hotels, told The Associated Press: “Zero percent in April, probably in May and probably in June. And based on the uncertainties of the challenges of reopening, will we have 20% of our revenue in July? 20% in August? 30% in September, October?”
He forecasts losses of 60-70% this year.
CORPORATE ACTION: Cash burn is key. A number of companies are recording no revenue and must devise new methods of conserving cash to ride out the pandemic.
— General Motors cancelled its quarterly dividend for the first time March of 2014, nearly five years after emerging from a government-funded bankruptcy brought on by the Great Recession.
The company is also suspending share buybacks and it’s extending $3.6 billion of a three-year revolving credit line until April of 2022.
GM’s North American factories have been shut down for more than a month due to fears of spreading the virus among workers. Automakers generally book revenue when they ship vehicles to dealers, so the lack of production has cut off most of GM’s income.
MARKETS: This is the business week of the earnings seasons, with nine Dow components reporting quarterly results.
— Global stock prices gained Monday after Japan’s central bank boosted support for financial markets as more governments prepared to reopen economies that were shut down to fight the coronavirus pandemic.