Chinese food delivery service company Meituan Dianping (Meituan) warned a negative year-on-year revenue growth and operating loss for the first quarter of 2020 as a result of the pandemic, the company said in its earnings statement on Monday.
“The pandemic has already caused severe disruptions to the daily operations of our merchants, including restaurants, local service merchants and hotels, which in turn resulted in downward pressure on our own operations for the first quarter of 2020,” Meituan’s statement said.
The company said they could not fully judge the impact on revenue for the rest of this year due to the high uncertainty of the evolving situation.
“It will take longer for user demand and merchant operations to recover to normal levels as the pandemic continues,” the company said. “The results of our operations for the following quarters could also be adversely impacted.”
Meituan, which is backed by Chinese internet giant Tencent Holdings Ltd. and made its stock debut in Hong Kong in 2018, reported a 2019 revenue growth by 49.5% year-on-year to RMB 97.5 billion from RMB 65.2 billion in 2018.
The company also reported their first annual profit in 2019 with total gross profit coming in at RMB 32.3 billion, a 114% rise from a year earlier. Adjusted net profit reached RMB 4.7 billion.
As the coronavirus has resulted in tremendous shocks to food and travel industries since January, many of the businesses Meituan partners with have seen severely hurt by the shortage of labor and supply disruptions.
Meituan established a special fund to support the resumption of operations for restaurants and other small businesses across the country. They are also partnering with banks to provide RMB 20 billion low-cost loans for these merchants.