From Maserati importers to newspaper owners, companies warn of falling profits as economic impact of Hong Kong’s political crisis spreads to more sectors

From property and aviation giant Swire Pacific to the owner of the Hong Kong Economic Times newspaper, companies are warning the months-long unrest that has gripped Hong Kong in its worst ever political crisis has weighed heavily on their bottom lines in the third quarter and could cut into their results for the year.

The city’s economy fell into a technical recession in the third quarter after more than five months of street protests that have been marked by increasingly violent confrontations between police and more radical demonstrators, including a tense stand-off between authorities and protesters at Hong Kong’s Polytechnic University in the past week.

Luxury retailers, hotels and other tourism-related businesses have reported lower sales and bookings as tourists have shunned Hong Kong in droves in recent months. But the effects from the slowing economy appear to be spreading to a broader range of companies.

As Hong Kong’s reporting season continues, more than a dozen companies have warned since the beginning of November that they will report a loss or see worsening profits – for the third quarter or the half-year – as a result of the city’s slowing economy. That is on top of 22 companies which cited the ongoing social unrest or weakening Hong Kong economy when issuing profit warnings in October.

On Monday, Auto Italia Holdings, an importer of Maserati sports cars to Hong Kong and Macau, warned it had a wider unaudited pre-tax loss of HK$8 million (US$1 million) in the 10 months ended in October, primarily because of a “decline in revenue of the car division due to [the] uncertain economic environment and weak market sentiment owing to continuing social unrest in Hong Kong.