USG People 3Q Net Drops, But Sees Some Signs Of Recovery

Dutch employment agency USG People NV (USG.AE) Wednesday posted a steep drop in third-quarter net profit as European labor markets continued to decline, and refrained from giving an outlook for the next quarter although it sees some signs of a recovery.

"Market conditions seem to show continuing positive developments after stabilizing in the previous quarter," said Rob Zandbergen, USG People's interim chief executive and chief financial officer, in a statement. "Considering the developments of the past months, we anticipate the positive trend will continue in the months to come."

Although USG People abstained from giving an outlook, Zandbergen said he was relatively optimistic about the fourth quarter. "Visibility has increased over the last 12 months," he told Dow Jones Newswires.

USG People reported third-quarter net profit of EUR4 million, 88% lower than a year earlier, while revenue fell 27% to EUR779 million.

Still, SNS Securities analyst Frank van Wijk said USG People's results "confirm our view that earnings will recover as of next year, helped by sharply lower costs and stabilizing markets." Van Wijk rates USG People at accumulate.

Petercam analyst Thijs Berkelder, who has a buy rating on the stock, was particularly pleased with USG People's debt position, which was reduced by EUR60 million to less than EUR200 million. "As such, the company can clearly stay away from its debt covenants, making an equity issue less necessary or likely."

Still, at 1547 GMT, USG People shares traded down 2.8% at EUR11.85, outperforming a 3.9% fall in the Midcap market in Amsterdam. The stock has gained around 40% since the start of the year amid a broad market rally and rumors that Switzerland-based Adecco SA (ADEN.VX) was interested in buying the Dutch company.

Dutch peer Randstad Holding NV (RAND.AE), one of the world's largest employment agencies, will publish third-quarter results Thursday.

Company Web Site: www.usgpeople.com

-By Maarten van Tartwijk; Dow Jones Newswires; +31-20-5715 201; maarten.vantartwijk@dowjones.com

Randstad NV (EU:RAND)
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