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Corporate Australia burdened by Omicron surge

01/23/2022 | 09:54pm EDT
Outbreak of the coronavirus disease (COVID-19) in Sydney, Australia

Feb 4 (Reuters) - Australia saw a record surge in COVID-19 infections due to the Omicron variant, which strained supply chains, overwhelmed hospitals, and clouded the outlook of firms that were recovering from the impact of the Delta outbreak.

Companies have had to shelve plans to ramp up their business, flag a hit to earnings, or earmark additional costs, as Omicron has thrown a spanner in the works of businesses that sought a brighter outlook for 2022.

Here is a list of companies that have a warned of a hit from the outbreak:

Westpac

Australia's fourth-largest lender recorded a A$118 million impairment charge in its first quarter, mostly due to increased provisions to account for COVID-related uncertainty.

Nick Scali

The furniture retailer reported lower first-half profit due to store closures and supply chain disruption. It said trading at its stores in January declined due to the Omicron wave, while shipping costs could hit profitability this fiscal year.

Newcrest

The gold miner said higher operating costs due to COVID-19 would continue throughout fiscal 2022. It said its annual cost forecast included $35-$45 million of potential additional COVID-related expenses.

Myer Holdings

The retailer said Omicron had hit trading and sales since Christmas due to forced store closures.

South32

The diversified miner cut its annual manganese ore output outlook from Australia, partly due to labor constraints, and said additional COVID-19 curbs in New South Wales could further impact labor availability in the first-half of 2022.

Fortescue

The world's fourth-largest iron ore miner warned a delay by Western Australia state in reopening its borders due to a surge in Omicron infections may worsen a labor shortage currently affecting the mining sector.

Korvest

The industrial equipment maker said it experienced workforce disruptions in January as workers were required to isolate due to rising COVID-19 cases.

Whitehaven Coal

Australia's biggest independent coal miner cut its 2022 managed run-of-mine coal production forecast, partly due to pandemic-led labor shortages. It said Omicron was hurting production in the country and there was material uncertainty about how much more impact COVID-19 would have.

Mount Gibson Iron

The iron ore miner said travel restrictions had limited the availability of skilled personnel, which continued to significantly challenge its operations.

BHP

The global miner said 2022 copper production will be towards the lower end of its forecast and cut its annual metallurgical coal output outlook, partly due to labor constraints from COVID-19. It expects workforce absenteeism because of the Omicron variant to continue into the early part of the second half of 2022.

Rio Tinto

The world's largest iron ore miner forecast weaker-than-expected 2022 iron ore shipments as prolonged COVID-19 disruptions led to labor shortages and production delays from the new greenfields mine at the Gudai-Darri project.

Wesfarmers

The retail conglomerate said rising Omicron cases had led to weaker trading conditions over Christmas and subdued traffic to its stores in the first half of January, while also disrupting its supply chain and stock availability as employees at its distribution centers missed work due to COVID-19.

Qantas Airways

The airline, which earlier reduced about a third of its planned domestic and international capacity for the March quarter, cut its domestic capacity further after Western Australia delayed opening its border.

Virgin Australia

The airline said it would reduce capacity across its network by around 25% for part of January and for February due to reduced travel demand and staff being required to isolate.

Bega Cheese

The cheese maker issued a profit warning and said the impact from COVID-19 had been "extensive and significant."

Inghams Group

The poultry producer said the rapid spread of Omicron was partly responsible for impacting supply chain and operations, and that staff shortages due to COVID-19 were hurting its production volume. (Compiled by Indranil Sarkar and Shashwat Awasthi; Edited by Shounak Dasgupta and Sherry Jacob-Phillips)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
BEGA CHEESE LIMITED -0.63% 4.76 Delayed Quote.-15.52%
BHP GROUP LIMITED -0.06% 47.8 Delayed Quote.15.25%
CHEESE FUTURES (CSC) - CMG (ELECTRONIC)/C1 0.00% 2.413 End-of-day quote.37.26%
FORTESCUE METALS GROUP LIMITED 0.29% 20.77 Delayed Quote.7.81%
INGHAMS GROUP LIMITED -1.79% 2.74 Delayed Quote.-20.29%
KORVEST LTD -0.26% 7.6 Delayed Quote.1.60%
MOUNT GIBSON IRON LIMITED -0.71% 0.7 Delayed Quote.65.88%
MYER HOLDINGS LIMITED -2.30% 0.425 Delayed Quote.-3.33%
NEWCREST MINING LIMITED -1.61% 25.04 Delayed Quote.2.29%
NICK SCALI LIMITED 0.00% 8.98 Delayed Quote.-41.50%
QANTAS AIRWAYS LIMITED -1.47% 5.38 Delayed Quote.8.98%
REGIS RESOURCES LIMITED 0.00% 2.04 Delayed Quote.4.62%
RIO TINTO PLC -0.38% 5541 Delayed Quote.13.70%
SOUTH32 LIMITED 0.21% 4.68 Delayed Quote.16.46%
WESFARMERS LIMITED 0.28% 46.31 Delayed Quote.-22.12%
WESTPAC BANKING CORPORATION 0.56% 23.54 Delayed Quote.9.65%
WHITEHAVEN COAL LIMITED 0.97% 5.2 Delayed Quote.97.32%
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