BERLIN, May 4 (Xinhua) -- The number of German companies which had to revise their own profit or sales forecasts rose to a new record level in the first quarter (Q1) of 2020 due to the COVID-19 pandemic, according to a study by the consulting firm Ernst & Young (EY) published on Monday.
A total of 77 profit or sales warnings had been registered, more "than ever before in a single quarter" and more than twice as many as in the same quarter last year, according to the EY study which evaluated the data of 304 German companies from the Prime Standard, the segment of Frankfurt stock exchange with the highest transparency obligations for companies.
The coronavirus crisis "is leading to massive restrictions on economic activity worldwide and to unprecedented sales losses in almost all major markets," said Hubert Barth, CEO of EY Germany.
Germany's automotive companies were particularly affected, according to the study. Seven of the 12 listed manufacturers and suppliers had to revise their outlook downwards. In the consumer goods sector, 44 percent of companies were affected.
On the other hand, there were no warnings from telecommunications companies and energy suppliers in Germany, according to the study. Profit warnings have to be published if it is foreseeable that the targeted business result will probably not be achieved.
In 80 percent of profit or sales warnings of German companies in Q1, "the current coronavirus pandemic and the resulting economic disruptions" were cited as the cause, EY noted.
"From March of this year at the latest, the forecasts of many companies became wastepaper," stressed Barth.
For the first time since the survey began in 2011, the majority of German companies found themselves unable to issue a new forecast, according to EY. In 45 of the 77 profit or sales warnings, the outdated forecast was not replaced by a new forecast.
The trend among German companies continued in April. Last week, German chemical giant BASF noted that the company would quantify its expectations for the future development of sales and earnings as soon as it was "again possible to make a reliable forecast."
"The first quarter of 2020 was not a normal quarter," said Martin Brudermueller, chairman of the Board of Executive Directors of BASF SE, when presenting the Q1 results. "The same will be true for the second quarter and likely for the entire year." Enditem