Skip navigation
Newswire

CORRECTED-UPDATE 1-SGS hurt by "deteriorating" Europe, mineral services

(Corrects sales figure and 2012 growth rate in paragraph six)

* First-half net profit up 10 pct to 265 mln Sfr

* Restructuring charge of 12 mln Sfr due to "deteriorating" Europe

* Sales revenue rises 7.2 pct to 2.857 bln Sfr

ZURICH, July 17 (Reuters) - The world's biggest testing and inspection company SGS missed expectations for first-half net profit, hit by a charge for restructuring and continuing weak demand for its minerals exploration services.

Net profit at the company, whose activities span from testing London's black cabs to food and toy safety, rose 10 percent to 265 million Swiss francs ($278.82 million), short of average forecasts for 293 million in a Reuters poll.

That included one-off expenses of 12 million francs resulting from restructuring measures "in response to the deteriorating market conditions in Europe".

However, the Geneva-based group forecast "solid top line growth and improved operating results for the full year on a constant currency basis," compared with a January outlook for "solid top and bottom line growth".

Testing and inspection firms like SGS and peers Intertek and Bureau Veritas have seen growth slow due to a sluggish environment in Europe and weak global demand for minerals testing services.

Revenue at SGS rose 7.2 percent to 2.857 billion francs, down from 15.1 percent a year ago, with sales at the minerals unit, its fourth-biggest behind oil, gas and chemicals, consumer testing and industrial services, declining 3 percent.

British firm Intertek said in May a sharper-than-expected decline in demand for its minerals business, particularly in Australia, Brazil and the Philippines, would drag on its profit margin this year.

SGS announced last month that carmaker Fiat's parent company Exor sold its 15 percent stake in SGS to Belgian conglomerate Groupe Bruxelles Lambert (GBL). ($1 = 0.9505 Swiss francs) (Reporting by Emma Thomasson; Editing by David Cowell and David Goodman)