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Proffice (PROEB:STO), one of Scandinavia’s largest staffing firms, today reported that first-quarter revenue dropped by -12% to €124.3 million (SEK 1,062 million) due to lower demand for staffing services.
Operating profit in the quarter declined -75% to €1.2 million (SEK 10 million). CEO Lars Kry said the firm is keen to save costs which are expected to amount to €25.7 million (SEK 220 million) this year.
The firm said market conditions continued to be weak in Sweden during the quarter. “The Swedish economy has been affected by the turmoil in Europe. Continued relatively high lay-off statistics helped our outplacement business increase +33% in the first quarter,” he said.
Norway posted growth with revenue increasing +1% in the first quarter although companies remain cautious, following the introduction of new regulations in the staffing sector. “Tougher economic conditions and increased uncertainty among customers with the introduction of the so-called Vikarbyrå Directive [aligned to European Agency Worker Directive] impacted our operations in Norway during the first quarter,” said Mr Kry.
Proffice Denmark continued to be profitable for the fifth consecutive quarter. But the company showed growth in Finland despite a tough economic climate, driven by Proffice Aviation.
Looking ahead, the company remains cautiously optimistic. “There are obviously many questions remaining over where the economy is headed,” said Mr Kry.
“During the quarter, the market in Sweden stabilised and we see some signs of increased activity. We are generating positive earnings in a continued weak economic climate, largely thanks to our action plan. With cost-consciousness, internal efficiency, and our proven high customer satisfaction, we will continue to be profitable – even in the current business climate.”
In early trading, the company’s share price sunk -1.4% to SEK 21.60, down -6% from a year ago. Based on this stock price, the firm has a market value of €491.5 million (SEK 4.2 billion).
According to Staffing Industry Analysts’ research, Proffice is among the three largest recruiters in Scandinavia.