Italy’s Amplifon withdraws guidance, freezes M&A cash-out over virus hit

MILAN (Reuters) – Italy’s Amplifon said on Wednesday it had withdrawn its 2020 guidance after reporting a slump in first-quarter core earnings due to the coronavirus pandemic.

The world’s largest retailer of hearing aids said it had no visibility over the length and depth of the socio-economic crisis resulting from the epidemic, which forced governments across the globe to impose heavy restrictions on business activity and people’s movements.

The company had previously guided for 2020 revenue of between 1.8 billion and 1.86 billion euros ($1.95 billion-$2.02 billion), recurring earnings before interest, taxes, depreciation and amortisation (EBITDA) of 330 billion to 345 million euros and operating cash flow of around 260 million euros.

Amplifon, which had already scrapped the payment of dividends on last year’s results, said it had suspended all non-essential investments, including cash-out for any potential acquisitions, to safeguard its finances from the negative impact of the outbreak.

However, despite the negative short-term impact of the virus on its sector, Amplifon added in the statement that given its “unique competitive positioning, along with the strong fundamentals of its market,” it expected to deliver renewed strong growth over the medium term.

Milan-listed Amplifon said revenue at constant exchange rates in the three months to the end of March fell 7.2% to 363.5 million euros ($394.51 million) compared with the same period of last year. EBITDA in the period dropped 17.8% to 64.9 million euros.

Shares in Amplifon were flat at 21.2 euros by 1306 GMT, compared with a 1.3 percent rise in Milan’s all-share index <.FTITLMS>.

(Reporting by Elvira Pollina; Editing by Steve Orlofsky)