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UPDATE 1-Dutch write-down hits ISS fourth-quarter net profit
March 12, 2015 / 9:32 AM / in 3 years

UPDATE 1-Dutch write-down hits ISS fourth-quarter net profit

* Denmark’s ISS sees 2-4 pct organic growth in 2015

* Q4 operating result in line with analysts’ expectations

* Shares fall as much as 3.3 percent (Adds quotes from CEO, details, background)

COPENHAGEN, March 12 (Reuters) - Danish cleaning and catering group ISS on Thursday reported lower than expected net profit in the fourth quarter due to a 420 million Danish crowns ($59.72 million) write-down in the Netherlands.

ISS, which listed in Copenhagen a year ago, said it had had operational issues in the Netherlands and that the write-down followed a review of its business plan assumptions in that country.

“We are focused on solving our problems in the Netherlands,” chief executive Jeff Gravenhorst told Reuters. He said ISS had made changes to the Dutch management team to make it a more commercial business with a local management.

“Now it’s a question of growth and we’ve won our first large contract in the country,” Gravenhorst said.

ISS shares, which were listed last year at 160 Danish crowns a share, fell as much as 3.3 percent to 205.50 crowns.

ISS, one of the world’s biggest private employers with more than 520,000 workers around the world, said it expected organic revenue growth of 2 to 4 percent in 2015 and an operating margin above the 5.6 percent reached in 2014.

Gravenhorst said that ISS’ cost-cutting efforts had begun to show their impact in the fourth quarter and that they would also help to increase margins in 2015.

He said he saw the development in the European economy as the most important swing factor for ISS’ 2015 results.

“If the European economy starts to improve it can help us to land in the high end of the guidance range,” he said.

Fourth-quarter operating profit was in line with analysts’ expectations, but net profit of 124 million crowns fell short of the 512 million expected due to the Dutch write-down.

ISS’ board proposed a dividend of 4.90 crowns per share versus the 4.88 crowns expected by the analysts.

$1 = 7.0502 Danish crowns $1 = 7.0328 Danish crowns Reporting by Teis Jensen. Editing by Jane Merriman

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