Global property broker Colliers said on Thursday that it expects to see 2020 revenue drop by 15 to 25% as a result of the Covid-19 pandemic.
Similarly, earnings before interest, taxes, depreciation and amortisaion (EBITDA) is forecast to decline by up to 35% this year on a like-for-like basis.
‘The impact of the Covid-19 pandemic, with its combined health toll and sharp decline in global economic output, is unprecedented,’ the company said in a statement to announce its first-quarter results.
Brokerage revenues, which represented approximately 55% of 2019 consolidated revenues and have a highly variable cost structure, are expected to decline sharply in the second quarter with gradual improvements in the third and fourth quarters. This expectation is based in part on the company’s experience in Asia, where the crisis started early in the first quarter and is currently showing a slow recovery, Colliers said.
Outsourcing & Advisory and Investment Management, which represented approximately 45% of 2019 consolidated revenues, are expected to remain relatively stable for the balance of the year with some variability depending on market conditions.
Colliers has taken ‘significant’ steps to adjust costs to expected revenues across all service lines, including reductions to support, administrative and leadership and related costs, it added.
For the quarter ended March 31, 2020, revenues were $630.6 mln, a 1% decrease (up 1% in local currency) relative to the same quarter in the prior year, adjusted EBITDA was $54.5 mln, up 25% (28% in local currency).
‘Colliers began 2020 with solid results despite the initial impact of the Covid-19 pandemic in Asia early in the quarter, with the rest of our operations affected primarily in March,’ said Jay S. Hennick, Global Chairman and CEO of Colliers International. ‘Given the uncertainty, we expect the balance of the year to be challenging, particularly for our Brokerage business.’
