July 29, 2020 / 12:18 PM / 6 days ago

Sweden's Securitas says to cut costs as second quarter profit beats expectations

STOCKHOLM (Reuters) - Securitas (SECUb.ST), the world’s biggest security services group, said on Wednesday it would cut costs further as its second-quarter earnings beat market forecasts despite impact from the coronavirus pandemic.

The provider of guard services, alarm surveillance and airport security has been negatively affected by the pandemic as demand for luggage screening at airports and other services have fallen sharply.

Securitas said it had launched new cost savings to be executed over the coming 12 months, with restructuring costs estimated at 350-500 million crowns.

It added it expects a positive impact from the fourth quarter, with a payback period of around two years.

The Swedish firm, whose rivals include Britain’s G4S (GFS.L), said it had seen some “encouraging signs” ­during the last few months as restrictions and closures had eased.

“However, much uncertainty remains about the duration and

long-term ­implications of the pandemic,” it said in the report. 

Securitas, for which wages account for the bulk of its costs, said in April it was withdrawing its dividend proposal due to the uncertainty caused by the pandemic, adding it might consider a new proposal later.

Second-quarter operating profit was 882 million Swedish crowns (77.49 million pounds) against a year-ago 1.24 billion. Four analysts had on average forecast a 677 million crown profit, according to data from Refinitiv.

Organic sales dropped 4%, down from 5% growth a year earlier.

Securitas shares, which were slightly down ahead of the report, rose 0.5% by 1142 GMT but have fallen 17% since the start of this year.

Reporting by Helena Soderpalm, Editing by Johan Ahlander

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