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Companies in e-commerce, video communications, cloud platforms, telemedicine are medical crisis big winners (analysis)

Village Blacksmith

The economic effects at the sectorial level of the pandemic generated by COVID-19 have divided business into four categories, namely the essential services, the great winners, the losers and the survivors, among the great winners being companies in e-commerce, video communications, cloud platforms and telemedicine, claim the representatives of PwC Romania.

"In the category of essential services are the pharmaceutical, food, health, telecommunications and utilities sectors. The big winners, those for which the current crisis represented an increase in market demand are, for example companies that are conducting their activity in e-commerce, video communications, cloud platforms or telemedicine. The obvious losers of the shock are economic entities in the sphere of tourism, entertainment, traditional retail or restaurants. The survivors, meaning those sectors which could emerge less affected by the crisis could be companies in the realm of financial services, the real estate sector, online retail, fashion or media," shows the article written by Sorin Petre, PwC Romania Partner, and Ileana Gutu, PwC Romania Senior Manager.

Furthermore, the assets in real estate are affected differently, depending on the area where the business is operating, but also the region of operation. Thus, certain operational assets (such as hotels and airports) are most acutely affected by the initial impact and it's expected to see a fast decrease of value depending on the spread of the virus. "Others may be affected but in time, over a longer period - we have in view here, for example, the areas of office, logistics, retail. Finally, there is a potential impact for the majority of sectors if we take into consideration extreme pandemic development scenarios," the PwC Romania article also mentions.

"For a significant number of sectors, however, it's clear that this medical crisis led to a drop in the financial performance on the short term which will be maintained, most probably, in the following months. There is the risk that the decline observed in the short term transform into an impact on the businesses on the medium and long term. Given that the value of a business is, firstly, determined by its capability to generate cash in the future, it's important to understand the impact of a potential recession over the cashflow projections of that business," the authors of the article also say.


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