Business
Posted: 2 months ago

Revenues of the 65% of Surveyed Companies Dropped by More than Half: PWC Research

A survey of businesses by PricewaterhouseCoopers Georgia LLC (PwC Georgia) and the Investors Council reveals that a decrease in demand is the most significant side effect of COVID-19 among all sectors. The study was conducted from 16-27 April through an online survey and generated 1,938 responses. 

The survey studied the impact of COVID-19 on the Georgian economy and business sector. As a result, PwC Georgia was able to assess the scale of the impact that companies faced after the start of the pandemic, difficulties that businesses experienced, their first actions related to combating the effects of the virus and what are the businesses' predictions regarding the development of the situation in their companies.

Among all sectors, decrease in demand is the most significant side effect of COVID-19. Decrease in demand meaningfully affected the revenues of the surveyed companies that have already dropped by more than half for 65% of respondents. From all the sectors, the accommodation and food service companies were effected the most – more than 75% of this sector is experiencing significant revenue reduction. 

Decreased demand, cash collection shortages and changes

in customer behaviors triggered liquidity challenges of the companies. 28% of interviewed companies comment that they have already faced liquidity challenges. Around half of the companies are expecting to face liquidity problems in the upcoming 1 to 6 months and only 15% of companies are optimistic that they can maintain liquidity without further reductions or downsizing.

As a quick solution to resolve decreased demand and liquidity issues, companies started to reduce their headcounts. More than 50% of surveyed companies have already experienced some employee reductions, with the tourism and service-related industries being most vulnerable (more than 40% have already reduced 100% of their employees). The agriculture sector has been the least affected from this perspective. 

As the trend continues, most companies are facing additional financing challenges. 79% of respondents mention that they need additional financing. However, 85% of those companies have not yet approached the financial institutions and the majority that did were not successful in obtaining additional financing. 

Among all sectors, decrease in demand is the most significant side effect of COVID-19. Decrease in demand meaningfully affected the revenues of the surveyed companies that have already dropped by more than half for 65% of respondents.

From all the sectors, the accommodation and food service companies were effected the most – more than 75% of this sector is experiencing significant revenue reduction. Projections from the respondents are somewhat positive and only half of them expect more than a 50% drop in revenue, while the accommodation and food service companies still expect to be
the most affected.

Read the full findings through PwC Georgia webpage:  https://pwc.to/2yIT0Dd