Canteen catering giant Sodexo: 1H profit up 18%

Catering giant Sodexo, providing canteen services from government departments to oil rigs, reported a 17.8-percent jump in first-half profits on Thursday, helped by cost-cutting and strong emerging markets growth in its benefits and services business. Net profit in the first half rose to 278 million euros ($384 million) from 236 million a year ago, the group said. Operating profit grew 9.5 percent to 529 million euros in the six months to the end of February. Sodexo is one of the largest catering and facilities management companies in the world, with nearly 428,000 employees in 80 countries, according to its website. The benefits and services business, which deals with employee rewards cards or meal tickets, posted strong growth, with organic revenue up 15.1 percent thanks to momentum in its South American, Asian and European businesses. "This was a good period for Sodexo. We had good results, especially the 11.4 percent rise in operating income, excluding foreign exchange impacts and before exceptional charges," Chief executive Michael Lande said on a conference call. The results proved "that our model is solid and generates cash," reaffirming the company's target of an 11 percent growth in operating profit and a 2.5-3 percent organic revenue growth in 2014. Last financial year its profits were hampered by expenses from its cost-cutting program, such as asset impairments and cancelling under-performing contracts. The group spent about 30 million euros on exceptional costs, including restructuring costs and exiting unprofitable deals in the first-half, it said. Its bases business, which includes oil platforms, mines and construction sites, has also been hurt by a slowdown in investment by the mining sector.