Randstad More Bullish On Recovery Even As Profit Misses Views

Dutch staffing group Randstad Holding NV (RAND.AE) Thursday posted a worse-than-expected fourth-quarter net profit, but signaled increased confidence in an economic recovery as markets stabilized.

"Our markets have stabilized and classical recovery patterns are visible," said Chief Executive Ben Noteboom. He added that "if recovery continues we should do very well."

The Diemen-based company swung to a net profit of EUR46 million in the fourth quarter of 2009, from a net loss of EUR233 million a year earlier when it was burdened by a non-cash goodwill impairment of EUR500 million related to its acquisition of Vedior. Analysts had expected a EUR54.6 million net profit for the 2009 period.

Revenue at the second-largest staffing agency by sales behind Adecco SA (ADEN.VX) dropped 19.7% to EUR3.18 billion. from EUR3.96 billion, just below analysts' forecasts of EUR3.22 billion.

Randstad said the recovery remains fragile, but it is facing the coming quarters with increased confidence.

Global staffing markets have contracted sharply in the past year as companies cut back on hiring or laid off staff in response to the downturn. Randstad has been cutting costs since early 2008 and was able to realize additional savings through the merger with Vedior NV, which it bought last year. Cost reductions were accelerated as the global recession started to gain pace, with Randstad cutting branches and personnel.

Randstad scrapped its 2009 dividend for the second time in a row, citing its leverage ratio.

It's net debt to earnings before interest taxes, depreciation and amortization, or Ebitda, stood at 2.5 at the end of the fourth quarter, above its target of between 0 an 2.

"We therefore aim to further reduce debt and propose that no ordinary dividend is paid for 2009," the company said in a statement.

Randstad shares Wednesday closed at EUR33. They have lost 5.4% since the start of the year, compared with a 3.6% fall for the benchmark AEX.

-By Robin van Daalen, Dow Jones Newswires; +31-20-5715200; robin.vandaalen@dowjones.com

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