The latest round of lockdowns are looking to be a real bite for some ASX stocks
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The latest round of lockdowns have really begun to bite in Australia and ASX stocks are not immune from impact.
Melbourne has entered its fifth lockdown overall and Sydney’s is now nearing the end of the third week.
While most lockdowns earlier this year only lasted a few days, the latest round have been enough for the federal government to reintroduce support packages having axed JobKeeper back in April.
Many ASX stocks are feeling the impact of lockdowns or bracing themselves for the worst.
One to comment this morning was Ingenia (ASX:INA) which operates holiday parks. It told shareholders this morning that recent restrictions for greater Sydney hit bookings at its NSW holiday parks.
“While demand is anticipated to rebound as restrictions ease, uncertainty around timing and length of restrictions remains the key determinant of holidays performance over FY22,” it said.
But even ASX companies that are “essential services” are feeling the pinch of the latest lockdowns.
One example is Pacific Smiles (ASX:PSQ) which told shareholders there was a negative impact on patient attendance and fees.
To add insult to injury, this was right as the company announced a bumper FY21 reaping patient fees of $240.8 million (29 per cent higher than the year before) and earnings of $33.1 million.
While medical companies are deemed essential services, the Dental Council of New South Wales advised non-essential treatments be deferred and practicing dentists have chosen to heed the advice.
Pacific Smiles says it will provide a further update at its full year results announcement on August 18.
Another company is VIP (ASX:VIP) which you might consider an essential service as it makes PPE (specifically gloves) in Malaysia.
However the Malaysian government sees otherwise and has specified it is not exempt. VIP told shareholders it has suspended operations at its factory whole awaiting clarification and this might have a short-term impact.