SGS profit up 33.5 per cent

SGS says it is on track to meet its targets Keystone

The Geneva-based inspection services firm, SGS, has reported a net profit of SFr371 million ($290.7 million) in 2005 – up 33.5 per cent on the year before.

This content was published on January 17, 2006 - 09:59

The result, which the company said was driven by good trading conditions, narrowly beat analysts' expectations.

SGS – the world's biggest inspection, verification and certification firm in terms of sales – said on Tuesday its outlook for the current year was "strong".

The company's net profit has been rising steadily for the past few years. In 2004 it was SFr279 million and in 2003 SFr224 million.

SGS said it would offer a SFr50-per-share payout to shareholders.

Sales were up 14.7 per cent to SFr3.308 billion. Operating income rose 27.7 per cent to SFr502 million.

The company said the group's businesses in Asia and eastern Europe were "significant contributors" to the improved results.

Analysts say the firm, which tests consignments of goods for a range of industries, has benefited from increased world trade and rising awareness of quality standards.

Outlook

In a statement, SGS repeated its target of SFr5 billion in revenue and earnings per share of SFr80 by 2008.

"The 2006 group outlook continues to be strong and in line with our three-year growth plan as commodity demand, trade flows, the regulatory environment and outsourcing trends should sustain favourably," it said.

"Organic growth should parallel last year's and operating margins are expected to continue to improve."

Analysts quoted by the Reuters news agency said the results put SGS on track to meet its ambitious earnings targets for 2008.

"The better than expected results in 2005 give them a strong base to work from," said Scott Weldon at the Geneva-based private bank Lombard Odier Darier Hentsch.

swissinfo with agencies

Key facts

In 2005 SGS reported a profit of SFr371 million, up 33.5% on 2004.
Sales were up 14.7% at SFr3.3 billion.
The group is proposing to offer shareholders a SFr50-per-share payout.

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In brief

SGS is the world's leading inspection, verification and certification firm in terms of sales.

It has 37,000 employees and 1,000 offices and laboratories in 140 countries.

The company was registered in Geneva in 1919.

It has been listed on the Swiss stock exchange since 1985.

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