Dutch staffing group Randstad sees tougher Q2 as coronavirus bites

[AMSTERDAM] Netherlands-based Randstad, one of the world's largest staffing companies, said on Wednesday core earnings fell by nearly a third in the first quarter as the coronavirus hit its business and forecast a "more challenging" second quarter.

In a statement, Randstad said earnings before interest, taxation and amortisation (Ebita) fell 29 per cent to 162 million euros (S$251.3 million), while sales dipped 5 per cent, to 5.4 billion euros.

Analysts polled by the company had on average seen sales of nearly 5.1 billion euros and Ebita of 117 million euros.

Randstad had said on March 23 it would cut its dividend payment for 2019 in an effort to retain cash due to financial uncertainty caused by Covid-19. It had intended to pay a regular dividend of 2.09 euros and a special dividend of 2.23 euros over 2019.

A revenue decline of 3-4 per cent for the beginning of the quarter accelerated to a decline of 30 per cent for the second half of March, Randstad said.

"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."

The company 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, it said.

REUTERS