Consultant posts 16% drop in operating profit
Arcadis has posted a 16% drop in global operating profit, with the firm blaming a severe recession in Brazil and a drop in North American revenue.
In half-year results to June this year, the consultant posted operating profit of €97.6m (£81.9m), down from €115.8m (£97.1m) the previous year.
Revenue was also down 4% to €1.26bn (£1.06bn), down from €1.32bn (£1.11bn) last year, with the firm highlighting a 38% drop in revenue in Brazil and lower revenue in North America.
However, Arcadis said the drop was compensated for by growth in Australia, continental Europe and the UK.
In the UK, Arcadis said there had been a slowdown in the building sector in London due to “Brexit-related delays on investment decisions”, but the firm posted an 8% increase in operating profit for the period to €20.5m (£17.2m), mainly due to higher revenue in its water and environment sectors.
Commenting on the results, Arcadis CEO Neil McArthur said: “As expected, the first half of 2016 remained challenging for the emerging markets and for our North American business as it goes through its transformation to restore growth and profitability.
“We are still facing a deep recession in Brazil, while parts of Asia are showing lower demand.”
He added: “In the UK, the Brexit has led to delayed investments in the building sector, while our infrastructure business continues to grow.
“We experienced more favourable conditions for our Continental European and Australian businesses, which, together with the UK, continued to deliver organic growth, also benefitting from strong growth in our infrastructure business due to the Hyder acquisition.”