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SGS makes loss after exceptional charge

SGs says it expects to improve its results this year Keystone

The world's largest inspection and testing group, the Société Générale de Surveillance (SGS), posted a loss of SFr75 million ($45.15 million) last year.

This content was published on March 22, 2002 - 15:01

SGS, which made a profit of SFr129 million in 2000, said that the cause of the loss was due to an exceptional charge of SFr177 million taken at its Global Trade Solutions unit, which offers services to governments, trade and international institutions.

In a statement on Friday from its Geneva headquarters, SGS said that its results had been affected by a new accounting policy, which created the charge.

Increased transparency

"This conservative accounting treatment, which has no cash impact, will provide increased transparency of the continuing GTS business going forward," SGS said.

The company said net profit before the charge was SFr102 million, which beat analysts' forecasts ranging between SFr89 million and SFr100 million.

The board of director is to recommend that shareholders approve a dividend of SFr6 per share at the company's annual meeting on May 2, an increase of 3.4 per cent over the previous year.

SGS said that sales revenue in 2001 was SFr2.332 billion, a decline of 1.6 per cent compared with the 2000 figure of SFr2.369 billion.

Revenue shrinkage at GTS

It reported that strong sales growth in most of the businesses had offset revenue shrinkage of 21.5 per cent at GTS. The decline was primarily due to the loss of contracts with the Philippines and the Ivory Coast in 2000, the group commented.

It added that confronted with lower volumes, GTS had invested in the development of new services aimed at protecting government revenues, helping international trade, monitoring aid programmes and promoting sustainable development.

In its outlook, the group said it expected to improve operating performance in 2002, as well as the 2001 net profit of SFr102 million before the exceptional charge.

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