French catering and food services group Sodexo has recorded an underlying operating profit margin of 3.1% for the six-month period through February, but cautious second-half forecasts, flagging short-term volatility in view of a resurgence in coronavirus infections.
The Paris-based firm's underlying operating profit margin of 3.1% for the six-month period through February beat its own raised forecasts of at least 2.5%.
"We are slightly above analysts' estimates, as the consensus was around 2.7%-2.8%," finance chief Marc Rolland said on a call with reporters.
Lockdowns have hurt the big catering companies such as Sodexo and British rival Compass Group, with offices closed in parts of the world and large public events on hold.
Sodexo, the clients of which range from England's Royal Ascot Racecourse to the US Marine Corps, cited the renegotiation of contracts and tight cost control as reasons behind the performance, as its restructuring programme moves forward.
In October, the group announced plans to cut more than 2,000 jobs as COVID-19 lockdowns ate into revenue. The plan should be implemented between now and the summer, chief executive Denis Machuel said on the call.
For the second half of its financial year through August, the company expects margins to be stable while it sees little improvement in quarter-on-quarter revenue volumes trends, given the new waves of the pandemic.
On Wednesday March 31, French president Emmanuel Macron ordered the country into its third national lockdown.
Sodexo shares slipped 0.4% by 0905 GMT on April 1, paring earlier losses of as much as 1.6%, with analysts seeing the guidance as generally disappointing.
"Downgrade"
"Guidance and results combined imply a downgrade to consensus [full-year 2021] operating profit," Berenberg's analysts said in a note to clients.
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