Six out of 10 South Korean companies fear business toll from the ongoing spread of new coronavirus called COVID-19, expecting the outbreak to translate into losses of 8 percent in overall sales and 9 percent in exports if it is protracted into the second half.

According to a poll released by the Korea Economic Research Institute of 1,000 biggest companies by sales in Korea last Friday, 61.8 percent of the companies expected the coronavirus outbreak will dent their business and management. They predicted a reduction of 8 percent in revenue, 9.1 percent in export volume and 12.7 percent in shipments to China on average if the outbreak lasts for longer than six months.

The lion’s share or 83.9 percent of companies with manufacturing facilities in China expected the outbreak to have a negative impact on their operation.

The respondents said the automobile industry will be suffering from the steepest drop in revenue of 13.9 percent due to the fallout, followed by auto parts with 12.8 percent, petroleum 12.4 percent, machinery 11 percent and textile 10.8 percent. They predicted petroleum products manufacturers will see the sharpest drop in their overseas shipments of 17.8 percent, followed by automobile 14.5 percent, machinery 11.6 percent, auto parts 11 percent and petrochemical 10 percent.

Even if the outbreak is contained within six months, Korean companies expected their revenue and exports to slip by 3.3 percent and 5.1 percent, respectively, on average.

While most of the companies expected a direct negative pull on their businesses, 29.5 percent believed there is no effective and viable solution to contain the spread. Most of 34.3 percent said restricting travels to China is the best containment measure, trailed by strengthening epidemic control in China with 10.5 percent and having employees work from home 10.2 percent.

Regarding the government’s support measures, more than half of 57 percent wanted quick and accurate information sharing, 21.2 percent stronger prevention system, 9.5 percent inter-governmental cooperation to aid businesses, 6.4 percent support for companies shipping products to China and 6.0 percent stimulating consumption and investment.

Meanwhile, according to latest consensus complied by market tracker FnGuide, estimations of the bottom line for 255 Kospi members were revised down by 4 percent from a month ago amid the epidemic. Categories with exposures to China were most downgraded - precision medicine down 52.25 percent, chemical 21.83 percent, steel and metal 18.01 percent and telecommunications 10.26 percent.

By Lim Sung-hyun, Kim Hyung-joo and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]