Nearly 67 per cent of chief financial officers believe that Covid-19 has the potential to significantly impact their business, said a survey by PwC, adding that those in the UAE were the region’s most concerned (77 per cent), while Saudi CFOs feel the impact is limited to specific areas of their business.

The primary concern for Middle East CFOs is financial impact, with 78% expecting a decrease in revenue as a result of the pandemic. This is particularly true in the UAE where 9 out of 10 executives are expecting a decrease in revenue or profits, revealed the first Middle East edition of the Covid-19 CFO Pulse Survey.

CFOs looking to cut costs are most likely to consider cost containment and deferral or cancelation of investments particularly on capital expenditure. From those in the region, this is especially true for the UAE (92%), it stated.

The survey puts spotlight on the region's CFOs and finance executives and how they plan to react to the Covid-19 outbreak, and what business and economic impacts they anticipate in the coming weeks and months.

According to the PwC survey, the investments in digital transformation, customer experience and cybersecurity are most likely to be protected and, as a result of Covid-19, 55% of CFOs expect to make changes to their supply chain (67% Saudi Arabia).

These results provide a clear indication of the likely focus areas post Covid-19,, it stated.

Over half of Middle East CFOs plan to take advantage of government support programmes, but this varies greatly by country. In Saudi Arabia, nearly 8 out 10 CFOs are considering or intending to do so.

Despite their concerns, a majority of CFOs in the Middle East believe that if Covid-19 were to end immediately, their company could get back to “business as usual” within three months. CFOs are concerned about the impact of Covid-19 on business operations and revenue

The survey reveals that UAE CFOs are the most concerned, with almost 9 out of 10 expecting financial implications, and more than half concerned about the potential for a global recession.

Highly affected sectors such as travel, tourism, hospitality and retail make up a material proportion of the country’s economy, so these findings are perhaps unsurprising, stated the survey.

Nonetheless, in Saudi Arabia, the level of concern is somewhat muted, with 45% of CFOs considering the situation to be an isolated challenge with limited impact.

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.

Around 92% of CFOs surveyed in the UAE are looking at such cost reduction strategies compared to 82% in KSA.

The survey 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.

Since Covid-19 first emerged, global supply chains have been tested as the pandemic grows. As a result, CFOs in the region and particularly in KSA are considering changing their supply chain strategies, stated PwC in its Covid-19 CFO Pulse Survey.
 
Looking at government support, Middle East CFOs compared to other territories, are more likely to avail of government stimulus packages available in their country.

The survey found that 8 out of 10 CFOs are now considering accessing such programmes in the Kingdom. However, in the UAE, it seems that almost a quarter of CFOs are still assessing the level of relief available and how this support can be accessed.

Despite their concerns, 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. In fact, the majority expect their business to return to business as usual within three months if Covid-19 were to end today.

UAE CFOs 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.

Stephen Anderson, Middle East Markets and Strategy Leader, said: "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 cyber security in the post Covid-19 era."-TradeArabia News Service