Randstad beats first-quarter expectations but warns on second-quarter, cuts bonuses

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

AMSTERDAM (Reuters) - Randstad RAND.AS beat first-quarter expectations on Wednesday to send shares in one of the world’s largest staffing firms higher, but warned of tougher times ahead as it scrapped management bonuses.

Earnings before interest, taxation and amortization (EBITA) fell 29% to 162 million euros ($176 million), but that topped the 117 million euros forecast by analysts polled by the company.

Sales fell 5% to 5.4 billion but beat the less than 5.1 billion analysts had forecast.

Randstad’s shares were up 4% in early Amsterdam trading.

The company forecast a “more challenging” second quarter noting revenue had fallen by around 30% in the second half of March as lockdowns due to the coronavirus intensified.

“The rapidly escalating impact of COVID-19 has driven an unprecedented deceleration in business activity,” it said.

“With Europe and the Americas recently following much of the Asia Pacific region into various stages of lockdown, we expect Q2 2020 to be more challenging with very limited visibility.”

It said it had halted all non-essential spending and withdrew or adjusted cash bonus schemes for senior management for 2020 in a large number of countries. Executive board members will not receive a cash bonus this year, the company said.

Randstad had said on March 23 it would cut its dividend payment for 2019, having previously planned a regular dividend of 2.09 euros and a special dividend of 2.23 euros over 2019.

Reporting by Anthony Deutsch; editing by Keith Weir and Jason Neely