oOh!media drops earning guidance in response to Covid-19 economic impact

Out-of-home advertising provider, oOh!media, is warning of earnings disruption in the wake of the Covid-19 pandemic sweeping the world and causing health and economic issues stretching from stock market volatility to event cancellations, travel disruptions and supermarket supplies shortages.

In a statement to the ASX, the company said performance in the first quarter is in line with the current financial year earnings guidance provided at the full-year results on 24 February 2020. The company's guidance forecast for FY2020 included underlying EBITDA of $140 million - $150 million, and Capex guidance of $60m - $70m.

However, deteriorating economic conditions and market uncertainty caused by the pandemic has made forecasting full-year revenue in the current environment difficult. As a result, oOh!media has withdrawn current financial year earnings guidance for the time being.

“This is particularly relevant for oOh! given the company has nine months remaining in its financial year to December 2020,” the statement said. “The company is taking decisive action to proactively manage the business through this period and ensure it remains well positioned for when conditions stabilise, and continues to make every effort to achieve the prior earnings guidance.”

oOh! also expects its capital expenditure will be significantly lower than even its lowest previous estimates range of $60-$70 million. In line with this, the company has withdrawn its capital expenditure guidance for this financial year.

The outdoor media business will wait until market conditions stabilise for any updates guidance and it expects to to reinstate earnings and capital expenditure guidance. 

“oOh! remains vigilant on cost and is maintaining strict cost and cash-flow discipline throughout the business,” the company stated. 

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