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Netherlands – Brunel revenue up, but profits disappoint

14 August 2014

Dutch staffing firm Brunel International (BRNL: NL) today reported revenue growth for the three months ending 30 June 2014 of €340.6 million, up +18% at constant exchange rates.

In terms of profit, the company was unable to match the revenue growth. Gross profit rose by +11% to €57.7 million, compared to Q2 2013, while EBIT only increased by +8% to EUR 14.5 million.

Jan Arie van Barneveld, CEO of Brunel International, commented: "We are reporting good H1 2014 results, but we are very aware of the different challenges we are currently facing in various parts of our business. The awareness within Brunel and the initiatives taken so far give me confidence that we're on the right track for long term growth."

Quarterly revenue derived from Brunel’s European operations was +4% up on Q2 2013 at €98.0 million, up from €94.4 million for the same period last year. Gross profit declined by -1% to €29.0 million and EBIT was down -28% to €5.5 million. Brunel Europe operates in Germany, the Netherlands, Belgium, the Czech Republic, and Austria. 

Brunel Germany, the company’s largest single market, reported a revenue decline of -1% in Q2 2014 to €48.8 million. Gross profit was down -5% at €16.1 million while EBIT decreased by -24% at €4.2 million, driven by a combination of a lower gross profit in Q2 and increased overhead.

In its home market, the Netherlands, Brunel reported quarterly revenue growth of +10% to €42.4 million compared to Q2 2013. Gross profit rose by +4% to €11.3 million, however, Dutch EBIT reduced by -36% to €1.5 million which the company said was due to investments in its sales force.

By business segment, Brunel Oil & Gas reported Q2 2014 revenue of €242.6 million at constant exchange rates, a year-on-year rise of +25%. Gross profit for the half-year rose by +26% to €28.7 million while EBIT rose +68% to €12.0 million.

Brunel Energy reported Q2 2014 revenue growth of +18% in constant currency to €200.4 million. Gross profit rose by +22% to €24.6 million and EBIT grew by 55% to €9.0 million. However, the company tempered expectations for this segment by stating that they expected Energy to be temporary affected by “the developments in the industry and the geopolitical situation”.

Brunel Projects reported Q22014 revenue growth of +57% to €42.2 million. Gross profit for the business rose by +61% to €4.1 million while EBIT climbed +122% to €3.0 million.

Dutch media company, RTL, reported that financial analysts at Rabobank had concerns about Brunel’s results given the weak margins in Germany and the Netherlands, lagging, stagnant growth in the energy markets in the United States and the overall cautious prognosis for 2014.

In early trading today Brunel traded at €18.53, -1.15% down but +3.76% above its 52 week low of €17.85 set on 8 August. This means the company is valued at €924.8 million.


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