SGS sticks to 2020 objectives after H1 profit rise


UPDATE 1-SGS sticks to 2020 objectives after H1 profit rise

(Adds comment from company about markets, details throughout)
    ZURICH, July 17 (Reuters) - Swiss testing company SGS
<SGSN.S> said on Monday its first-half net profit rose about 7.8
percent, in line with expectations, and confirmed it was on
track to meet its 2020 objectives despite continued headwinds in
energy markets.
    Net profit attributable to shareholders was 276 million
Swiss francs ($286.22 million), SGS said in a statement,
compared with the average forecast of 274 million francs by
analysts in a Reuters poll.
    Sales rose 4.9 percent on a pro-forma basis to 3.05 billion
francs, also in line with the poll. [nL8N1K43KV]
    The company said it remained committed to its 2020
objectives, including average mid single-digit organic sales
growth and about 1 billion francs in revenue from acquisitions
in 2016-2020.
    "The strong growth was mainly attributable to the non-energy
related businesses," the company that tests and inspects
everything from London's black cabs to gluten-free products and
baby toys, said in a statement on Monday.
    SGS and its peers Bureau Veritas <BVI.PA> and Intertek
<ITRK.L> are benefitting from an increased trend towards
certification in all areas, but have recently faced headwinds
from falling oil prices, an important business area.
    "The energy market continued to face challenges due to the
contraction in oil and gas capital expenditure and persistent
low pricing in North American and European markets," it said.
"In South America, public investments in infrastructure and
construction remained low."
    SGS also confirmed its mid-term outlook for an adjusted
operating income margin of at least 18 percent by 2020.

($1 = 0.9643 Swiss francs)

 (Reporting by John Miller; Editing by Biju Dwarakanath)
 ((zurich.newsroom@thomsonreuters.com; +41 58 306 7336;))


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