May 12, 2020 / 5:36 AM / 16 days ago

Dufry warns it will keep bleeding cash if airports lockdown extended

(Reuters) - Swiss airport retailer Dufry’s (DUFN.S) warned on Tuesday that the company will keep on burning cash in coming months if sales at its duty-free shops do not resume soon.

Dufry’s Chief Executive Julian Diaz said on a conference call that in a no-sales scenario, cash burn from June onwards would be in a range of 70 million to 75 million Swiss francs ($72.3 -77.5 million) monthly.

The company also confirmed it used up around 200 million Swiss francs in April versus a previously guided range of 200 million to 215 million Swiss francs ($206.7-222.2 million), and added that the figure for May was just shy of 100 million Swiss francs due to previous commitments.

The world’s largest duty-free operator reported a 94.1% slump in sales in April as travel curbs due to the novel coronavirus pandemic remained in place and hurt its first-quarter organic growth.

Dufry, which operates in 65 countries with about 420 locations globally and earlier withdrew its full-year outlook, said in a statement on Tuesday that persistent uncertainty about lifting of travel restrictions made recovery predictions difficult.

It added that it prepared for different scenarios with full-year sales declines ranging from 40% to 70%.

The retailer, which earlier in March announced job cuts as part of a 60 million Swiss franc cost-saving programme, said in April it was also making use of several government support schemes in Switzerland, Greece, Spain, Italy, the United Kingdom, and Germany, among others, to reduce staff costs and help the company stay afloat.

On the call, Diaz declined to comment when asked whether the company was planning further staff reductions and a rough number of how many jobs have been cut so far.

Dufry’s stock was down 3.8% at 1440 GMT, after dropping to 7% on Tuesday morning.

The company’s shares have lost over 70% so far this year, as the pandemic has brought global travel to a standstill.

($1 = 0.9676 Swiss francs)

Reporting by Linda Pasquini and Milla Nissi in Gdansk; Editing by Tomasz Janowski and Emelia Sithole-Matarise

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