CFOs in UAE feel heat from financial impact of Covid-19 more than others in Middle East
Chief financial officers (CFOs) in the UAE are most concerned about the financial impact of Covid-19 rather than other countries in the Middle East, a new survey by PwC shows.
The first edition of the Covid-19 CFO Pulse Survey shows that the majority of Middle East CFOs believe the pandemic has the potential to significantly impact their business operations and decrease the revenue or profit of their organisation.
67% of CFOs in the Middle East believe that Covid-19 has the potential to impact while 77% in the UAE are more concerned and 45% in Saudi Arabia feel the impact is limited to specific areas of their business.
“Businesses all around the world are adjusting to working remotely, and although they are prioritising financial security in the short term, CFOs still have an eye on the likely acceleration of transformation in areas such as customer experience, digital and cybersecurity in the post-Covid-19 era,” Stephen Anderson, Middle East Strategy and Markets Leader, PwC Middle East, said.
However, he said that cybersecurity and privacy concerns are surprisingly low across the board – perhaps indicating that many organisations are still in the initial ‘mobilise’ phase of response – dealing with the immediate concerns around the availability of cash.
About 78% of CFOs are expecting a decrease in revenue as a result of the pandemic while 9 out of 10 executives in the UAE are expecting a decrease in revenue or profits and more than half are concerned about the potential for a global recession.
Executives looking to cut costs are most likely to consider cost containment and deferral or cancellation of investments particularly on capital expenditure while more than half of them plan to take advantage of government support programmes, but this varies greatly by country.
“Business implications of Covid-19 include cost-cutting where Middle East CFOs will focus on cash flows in the weeks and months ahead and are most likely to consider cost containment measures to protect the future of their business. 92% of CFOs surveyed in the UAE are looking at such cost reduction strategies compared to 82% in Saudi Arabia,” survey reveals.
It also revealed that 83% of CFOs across the region are deferring investments by firstly reviewing their capital expenditure, followed closely by business operations and workforce. Such measures will free up some reserves, giving CFOs some breathing space as the situation continues to develop.
Despite their concerns, Anderson said that CFOs in the Middle East are expecting to get back to normal sooner rather than later; pausing or delaying investments instead of cancelling them altogether. The majority expect their business to return to business as usual within three months if Covid-19 were to end today.
“CFOs in the UAE are a little less optimistic, however, with a far higher proportion expecting a longer recovery timeline of 6-12 months when compared to their regional and global counterparts,” he said.
The immediate impact has forced CFOs to closely look at their operating costs, especially their workforce fixed costs.
“Having access to real-time quality information is one of the main challenges facing CFOs as they look to make informed decisions in unprecedented business disruption. Having a view on short term liquidity will inform the CFO of what measures to take around cost control and cash conservation, and when to take them,” Mo Farzadi, Business Restructuring Leader at PwC Middle East, said.
Chief financial officers (CFOs) in the UAE are most concerned about the financial impact of Covid-19 rather than other countries in the Middle East, a new survey by PwC shows. The first edition of the Covid-19 CFO Pulse Survey shows that the majority of Middle East CFOs believe the pandemic…
