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Adecco makes Q2 profit even as revenue falls more than…

ZURICH, Aug 6 – Swiss staffing company Adecco generated a surprise second-quarter profit even as its revenue fell by 29% as the coronavirus pandemic hit hiring around the world.

Revenue of 4.18 billion euros ($4.97 billion) topped the 3.84 billion expected in a consensus of analyst forecasts provided by the company.

Adjusted for trading days, organic sales fell 28%.

“The rate of revenue decline was greatest in April and improved as the quarter progressed, with June declining 26%organically and (trading day adjusted) year on year and July showing further gradual improvement,” it said.

Adecco posted a net profit attributable to shareholders of 21 million euros for the three months to June 30, far better than the loss of 56 million the market expected, but down from a profit of 159 million a year earlier.

Its shares were indicated more than 2% higher.

“We see early signs of improvement as lockdowns ease, and we have supported almost 100,000 associates back to work since the April trough. Nevertheless, the recovery is likely to be gradual and potentially volatile, as much uncertainty persists,” CEO Alain Dehaze said.

The coronavirus has reduced temporary and permanent hiring, hurting staffing companies such as Adecco and rivals Randstad and Manpower.

Randstad last month reported a 26% drop in revenue and a loss of 57 million euros.

Manpower’s revenue fell 30% as it posted a loss of $64.4 million for the second quarter.

Adecco said its revenue by geography broadly mirrored the progression of the pandemic. Permanent placement revenue were hit most in the second quarter, down 45% organically, while counter-cyclical career transition had organic growth of 2%.

It said it performed ahead of the market in countries including France, Italy, Spain and Japan.

Its gross margin was 18.8%, down only 10 basis points year on year organically, it said, citing cost controls and the strength and diversity of its portfolio. ($1 = 0.8418 euros) (Reporting by Michael Shields and John Revill; editing by Thomas Seythal and Jason Neely)

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