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Top managers have no idea about coronavirus

UNITED STATES (OBSERVATORY NEWS) — Top management of global companies has no idea about the impact of the coronavirus outbreak and how it will affect their companies, portfolio manager told CNBC.

Many companies emphasize that their activities will be affected by the virus, and some have already taken precautions. But Pieter Taselaar, founding partner of Lucerne Capital Management, an investment firm specializing in continental Europe, said the world is only “in the middle” of the outbreak.

“I think that all management statements have the opposite picture. All releases and earnings forecasts in some way include perhaps one month of coronavirus, and we really are in the midst of this, maybe … it can last another six months. And even the leadership has no idea what will happen, “he said.

Company executives have warned of the effects of the outbreak in recent earnings reports, but many are optimistic.

Ilham Kadri, CEO of Solvay, an international chemical company based in Belgium, told CNBC that “we expect the impact (on revenue) in the first quarter alone to be 4%.” Carlos Tavares, executive director of the PSA automaker, also told CNBC that “so far we have a good situation.”

Meanwhile, the largest German airline Lufthansa announced earlier that it is implementing a number of measures to reduce the impact of the virus, including allowing employees to take unpaid leave.

Lufthansa also said that it was too early to evaluate the full effect of the virus. European airlines on Wednesday traded on the stock exchange with a decrease of about 3%.

Taselaar of Lucerne Capital Management said he was not hoping for 2020 in terms of revenue.

“You are probably looking at a year of lost profits for many companies,” he told CNBC.

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