April 8, 2020 — One of Croatia’s larger private companies is warning of a 2020 so bad, it still cannot forecast the losses. Another cut management-level salaries to avoid layoffs.
Adris, a diverse conglomerate with holdings in everything from tourism to the nation’s largest insurance company, said anti-COVID-19 measures would have a significant impact on its revenues. But it is avoiding layoffs. Instead, it will cut management-level salaries by 30 percent for three months, with an option to extend another three.
It also promised it won’t lay off any of its 8,000-plus employees.
“Regardless of the circumstances domestically and globally, and of the severity of economic and social situation, Adris Management Board decided that no employees would be laid off,” company said in a statement. “The investments that have already been agreed and investments that have been launched will be realized, and preparations for planned projects will also continue.”
Atlantic Grupa offered a dour outlook, saying it’ll fall short of its 2020 targets, though it cannot say by how much.
“Due to the uncertainty related to COVID-19 pandemic, both from the perspective of its impact on the economy and consumption and from the perspective of its uncertain duration, the impact on our financial and operating results cannot be estimated in more detail at this time,” it said in a letter, adding it’ll have a better understanding of the situation by the end of the month.
The company finished 2019 with HRK 187 million in profits, an increase over the previous year.
“Market policies and initiatives to reduce the spread of COVID-19 have significantly increased across all Atlantic Grupa’s key markets,” the company wrote. “These initiatives, among others, have a significantly negative impact on tourism and hospitality industry, as well as on many other sectors, considering that they include closure of hotels, restaurants and cafes, the cancellation of all sporting and entertainment events, significant limitations in travel, insisting on social distancing, shorter working hours of grocery stores with full closure of almost all other stores, and the adoption of work from home policies wherever possible.”
It added that it supported any and all measures being taken to stop the virus’s spread, and will weather the coming economic downturn.
“We have entered into this situation from a very strong financial position and record-high results in 2019, which enables our business continuity even in these difficult market circumstances,” it wrote.
The conglomerate sells several Balkan drink and snack staples, including Cedevita, Smoki and Cockta. It also owns the Farmacia pharmacy chain. It will donate HRK 28 million to various crisis headquarters and health institutions around the region.
Adris Grupa’s annual income is slightly over HRK 3 billion. It owns hospitality group Maistra, fish-farming and processing firm Cromaris, and it recently bought insurance company Croatia Osiguranje, among others. The company has so far donated HRK 3 million to Pula and Rijeka’s hospitals to buy ventilators, as well as HRK 2 million for Zagreb’s earthquake recovery.