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Weak demand in the UK’s financial services sector combined with a slowdown in permanent recruitment in France and Belgium have contributed to a sharp fall in European profits during the third quarter at international recruitment company Hudson Global (HSON:NASD).
The firm has seen “deteriorating” conditions across global markets and made losses in the three months to September. It is now expecting group revenue to fall by up to 24% in the fourth quarter of the year. Full-year revenue is forecasted to decline by as much as 19%, the recruiter reported on Thursday.
“During the third quarter, the business environment deteriorated further due to global economic uncertainties,” said Manuel Marquez, chairman and chief executive officer at Hudson.
Group revenue declined by -23% to US$187.9 million in the third quarter when compared to a year ago – at constant currency the fall was -21%. Gross profit was down by -27% to US$67.7 million (-24.5% in constant currency).
Faced with a restructuring charge of US$1.5 million that mainly affected Europe, the firm made an operating loss of US$1.6 million against an operating profit of US$6.2 million a year ago. It reported a net loss of US$2.2 million compared to a net income of US$3.4 million at the same time last year.
Hudson is the 31st largest staffing firm in the world, according to research by Staffing Industry Analysts, and has a heavy presence across Europe.
European revenue declined by -22% to US$75.3 million in the quarter. European gross profit was down by -26% (-20% in constant currency) to US$28.2 million. Actions taken to address deteriorating market conditions in Europe resulted in cost and headcount reductions of 13% and 18% respectively, from the same period a year ago. Hudson made an operating loss of US$0.8 million compared to an operating income of US$3.5 million a year ago.
In Asia Pacific, revenue also declined by -27% to US$73.4 million with gross profit falling -28% to US$29.8 million. The firm’s operating income in the region decreased sharply by -40% to US$3.7 million.
Despite the negative outlook, the stock price was up +8.2% on Thursday to US$ 4.37, a +9% increase from a year ago and +35.3% above the 52-week low of US$3.23 seen in July. Hudson has a market value of US$145.17 million.