Italy's firms could lose up to 18% of sales this year due to virus - Cerved

Revenues at Italian companies could fall up to 17.8% this year compared to 2019, with tourism and the automotive sector being hurt the most by the spread of coronavirus, credit rating group Cerved said on Tuesday. Analysts have said the crisis linked to the infectious disease will plunge Italy - hit by the worst outbreak of coronavirus in Europe - into its fourth recession in just 12 years and batter company balance sheets. The Milan bourse has fallen 40% in barely three weeks.

"The spread of Covid-19 is probably the most important shock to our economic system since World War Two," Cerved says. Under the worst-case scenario considered by Cerved's 'Industry Forecast' the virus outbreak will last the whole year, leading to "a complete isolation of the Italian economy" but a rebound is expected in 2021.

Companies would not, however, return to the level of their 2019 revenues by then and sales at the end of 2020 year would be down 17.8% year-on-year. If the crisis lasts the whole year the over 750,000 companies in some 200 sectors considered by Cerved would lose 650 billion euros in 2020 and 2021 combined, compared to if there had been no outbreak.

Under this scenario, sales in the hotel industry are expected to fall 73% while those in the automotive and transport industries would be down some 50% this year compared to 2019, Cerved said. Conversely, sales in e-commerce, food delivery and wholesale pharmaceutical companies would rise 55%, 23% and 14% respectively.

Alternatively, in a baseline scenario - which assumes that the coronavirus crisis will be resolved by May - firms would lose 7.4% of their revenues this year compared to 2019. They would then recover in 2021 with revenues up an estimated 9.6%, taking them above 2019 levels. In this more optimistic scenario, Italian companies would however lose 220 billion euros this year and a further 55 billion in 2021 compared to a 2020 without any crisis.

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