Randstad core profit, revenue drop on weaker European markets

FILE PHOTO: The logo of personnel service provider Randstad is seen at an office building in Zurich, Switzerland October 2, 2018. REUTERS/Arnd WiegmannRandstad/File Photo

AMSTERDAM (Reuters) - Dutch staffing company Randstad RAND.AS on Tuesday reported lower fourth-quarter core earnings and organic revenue, as its main European markets remained weak.

The Amsterdam-based company said core earnings fell 8% to 292 million euros ($318.5 million). Analysts polled by the company on average had expected adjusted earnings before interest, taxation and amortization (EBITA) to drop to 294 million euros, from 316 million euros in the same quarter a year earlier.

Organic revenue fell 3% to just under 6 billion euros, as slowing economic growth led to declining sales in Germany and the Netherlands. Revenue in the United States slipped 3%.

The company said it expected its profit margin in the first quarter of this year to be slightly lower than the 4.9% level of the previous quarter, as sales dropped 3% to 4% in the first month of the year.

Chief Executive Officer Jacques van den Broek said 2019 was a challenging year.

“Revenue was slightly down, reflecting ongoing macro and political uncertainties, primarily in Northern Europe,” van den Broek said.

Despite the hurdles, Randstad said it would raise its dividend almost 30% to its highest level ever, as it managed to keep its profit margin roughly stable last year, while generating record free cash flow of 915 million euros.

Reporting by Bart Meijer; Editing by Shri Navaratnam