The oOh!Media Ltd (ASX: OML) share price is crashing lower on Monday after providing an update on the coronavirus impact.
In morning trade the media and advertising company's shares are down 11.5% to $1.37.
What did oOh!Media announce?
This morning oOh!media provided the market with an update on current trading and its assessment of the potential financial implications of COVID-19 outbreak.
According to the release, revenue for the year to date has been in line with the prior corresponding period. This means that its performance in the first quarter was consistent with delivering on the FY 2020 earnings guidance it provided with its full year results on February 24.
That guidance was for underlying EBITDA pre AASB16 to come in between a range of $140 million and $155 million.
However, management notes that the deteriorating macroeconomic conditions and market uncertainty caused by COVID-19 has made forecasting full year revenue in the current environment difficult. This is particularly the case for oOh!media given the company has nine months left to run on its financial year.
In light of this and in accordance with its continuous disclosure obligations, the company has withdrawn its FY 2020 earnings guidance for the time being.
This follows similar moves by travel agent Flight Centre Travel Group Ltd (ASX: FLT) last week and Cochlear Limited (ASX: COH) this morning.
What now?
The company advised that it is taking decisive action to proactively manage the business through this period and ensure it remains well positioned for when conditions stabilise.
And although it has been withdrawn, management continues to make every effort to achieve its prior earnings guidance.
In addition to this, its capital expenditure is being re-prioritised and will be materially below the bottom end of the previous guidance range of $60 million and $70 million. This guidance has also been withdrawn.
Management advised that it remains vigilant on its costs and is maintaining strict cost and cash-flow discipline throughout the business. Once market conditions stabilise, it will seek to reinstate earnings and capital expenditure guidance.
