Adecco: industrial demand boosts net profit

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The world's biggest temporary employment agency, Adecco, on Wednesday announced second quarter net profit of 97 million euros (127 million dollars), beating analysts' expectations with a revival in industrial demand.

It made a loss of 147 million euros in the same period last year.

"Business conditions in the second quarter improved considerably," thanks to strong growth in the group's main markets of France and North America, Adecco's chief executive officer Patrick de Maesenaire said in a statement.

"We see no evidence of a slowdown in our business and demand is robust among most markets," he added, as the group shrugged off concerns uncertainty about the broader economic recovery.

Analysts had forecast a slower recovery of Adecco's fortunes following the economic crisis and employment downturn, with a predicted net profit of 81 million euros in the second quarter.

The employment agency's second quarter revenues grew by 29 percent to 4.6 billion euros

De Maesenaire said the group had also posted double digit revenue growth in other markets including Germany, Italy, nordic countries and emerging nations.

"Demand was particularly strong in the industrial segment, but also our professional staffing business returned to growth in the second quarter," he added.

Staffing demands from industry grew by about a quarter.

While turnover was boosted in key European industrial powerhouses, it declined 14 percent in Japan and by three percent in Britain and Ireland.

Currency fluctuations with the weaker euro added four percent to revenue figures, Adecco estimated.

The company said it had high hopes of its growing venture into higher margin professional recruitment business.

"Despite current concerns about the sustainability of the economic recovery, developments in the staffing industry continue to signal healthy demand and management is confident of strong revenue development near term," Adecco said in its outlook.

Analysts at Bank Wegelin cautioned that the group was not immune from a feared shift in the economic climate and its impact on investors, although Adecco was "well positioned" for the future.

Adecco's share price dropped by 3.0 percent on the Swiss exchange to 53.95 Swiss francs in morning trading (0821 GMT), as the overall SMI index dipped by one percent.

© 2010 AFP

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