May 12, 2020 / 7:45 AM / 15 days ago

Nordic gym chain SATS posts falling Q1 profits due to virus, digital development

OSLO, May 12 (Reuters) - SATS, a Nordics-wide chain of gyms, reported falling profits in the first quarter year-on-year due to the novel coronavirus pandemic forcing it to close outlets in some countries and to develop new online products at a rapid pace.

Sports clubs have been among the hardest hit businesses during the COVID-19 outbreak as they were among the first to be closed down by authorities to prevent contamination.

Those offering online options have benefited, however, with Peloton Interactive raising its forecast for full-year revenue on May 6 as stay at home orders led to a surge in sales of the company's exercise bikes and fitness subscriptions.

"SATS leaves behind a challenging quarter, weighted by the outbreak of COVID-19 and the following closure of clubs, but also dominated by a high pace of innovation and numerous product launches," the Oslo-listed firm said in a statement.

SATS' adjusted earnings before interest, tax, debt and amortisation fell 67% year-on-year to 40 million crowns ($3.88 million) in the quarter.

SATS has gyms in Sweden, Finland, Denmark and Norway where authorities have taken very different paths to control the COVID-19 outbreak.

After closing all clubs of its own accord on March 12, SATS reopened gyms in Sweden on March 26 and Finland on April 24. Its gyms in Denmark and Norway are still shut.

In the meantime, SATS developed digital products including live sessions, online physiotherapy, online personal training and online nutrition counselling, and has launched outdoors classes, including yoga and pilates, at some venues.

"SATS expects the negative effects caused by the COVID-19 outbreak to prevail some time after reopening of all clubs," SATS said.

"The long-term outlook is still dominated by society's increased focus on health and well-being and robust global trends, such as political initiatives for health and digitalization," it added.

SATS shares were down 1.6% at 0727 GMT, trailing a 0.6% rise in the Oslo benchmark index.

$1 = 10.3099 Norwegian crowns Reporting by Gwladys Fouche, editing by Ed Osmond

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