SGS First-Half Profit Misses Estimates After Euro Zone Weakens
SGS SA (SGSN), the world’s largest product inspector, reported lower-than-expected first-half profit after restructuring costs in Europe and a slowdown in parts of its minerals business.
Net income rose 10 percent to 265 million francs ($281 million), the Geneva-based company said in a statement today. That missed the average 296 million-franc estimate of seven analysts surveyed by Bloomberg. Sales increased 7.2 percent to 2.9 billion francs excluding currencies.
“Economies in the Eurozone continued to weaken during the semester necessitating further restructuring of our operations there,” said SGS. Restructuring resulted in one-time costs of 12 million francs, it said.
SGS is a gauge of the broader economy as it sells verification and testing services for industries from agriculture to finance. The company reiterated an earlier forecast for “solid” top- and bottom-line growth in 2013. The company announced four acquisitions this year in China, South Africa and the U.S. as it seeks to reach a sales target of 8 billion francs by the end of 2014.
Groupe Bruxelles Lambert SA (GBLB) became an SGS shareholder last month after paying 2 billion euros ($2.6 billion) for a 15 percent stake owned by Exor SpA (EXO), the Agnelli family holding company which controls Fiat SpA. (F) Billionaire August Von Finck and members of his family own 14.97 percent of the company, which started in 1878 as a grain inspection house.
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