Seven Group withdrew market guidance for 2019-20 on Wednesday in the face of uncertainty around the impact of COVID-19 and the potential for even tighter government controls on movement and business activity.
Mr Stokes, whose father Kerry Stokes is chairman of Seven Group and controls a 61 per cent stake, said provisions had been put in place in the resources and construction industries to safeguard workers while allowing operations to continue.
“With those provisions in place those sectors should continue to function to support our economy as much as possible,” he said.
Mr Stokes said comments from Prime Minister Scott Morrison that “everyone who has a job in this economy is an essential worker” were an important indicator of continued support for the resources, infrastructure and construction sectors.
COVID-19 has had limited impact on heavy machinery provider WesTrac to date. Mining and construction activity has been largely unaffected, with WesTrac revenue up 15 per cent on the same time last year.
Infrastructure-aligned Coates Hire’s revenue is up 3 per cent despite losing the events segment of market.
Seven Group said it had a $300 million “crisis liquidity buffer” to support its operations through any government-mandated actions.
It will also pay a fully franked dividend of 21¢ a share on April 20 as previously announced.
Media, resources arms in disarray
The company said COVID-19 control measures already put in place by governments had hit advertising markets and major sporting events and in turn its earnings referable to Seven West Media, while the plunge in the oil price will impact earnings from Beach Energy.
Both businesses have independently amended their guidance.
Mr Stokes said the oil and gas sector had been hit by a massive dislocation in demand caused by global industry shutdowns, particularly in transport.
“We have seen a big step down in oil demand. We believe that is a thematic through this year but don’t believe that is a structural thematic,” he said.
“We think once the world get through this, the demand profile will come back. Hopefully as stimulus measures are put in place we’ll see incremental opportunities and growth in demand.”
Mr Stokes said Seven West Media had been prudent in responding to interest in its West Australian Newspapers business, but poured cold water on a sale.
“It is not something we are looking to do (sell WA Newspapers). We still believe in the value of the integrated model and the value of The West and the opportunity for cross promotion between television and print,” he said.
The integrated newspaper and television operations in WA share the same building in Perth, with the site itself up for sale as Seven West Media tries to cut its huge debt.
The Seven Group owns 41 per cent of Seven West Media, where Kerry Stokes is also the chairman.