March 11, 2020 / 8:30 AM / a month ago

UPDATE 1-Spirax-Sarco forecasts hit to 2020 results due to virus outbreak

(Adds hit to 2020 results, 2019 numbers)

March 11 (Reuters) - Spirax-Sarco Engineering on Wednesday forecast a hit to its 2020 results and cautioned that its performance in China so far was significantly short of expectations due to coronavirus-related disruptions.

“Political and economic uncertainty, as well as COVID-19, continue to dampen global industrial production growth forecasts, although we currently assume that conditions will begin to improve during the second half of the year,” Chief Executive Officer Nicholas Anderson said.

Spirax-Sarco estimates the coronavirus to hit its 2020 profit by 4% and sales by 2%, with nearly all the impact expected in the first half of the year.

The thermal energy management and niche pumping specialist said it has already started a number of cost cutting measures to mitigate the impact from the epidemic.

The company also expects business in China to return to normal levels by the end of the second quarter, with some recovery of lost business in the second half of the year.

Spirax-Sarco’s statutory pretax profit plunged 18% to 236.8 million pounds for the year ended Dec. 31. Organic sales, however, grew 6%, partly helped by its takeover of electric thermal solutions specialist, Thermocoax. (Reporting by Muvija M in Bengaluru; Editing by Shailesh Kuber)

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