STOCKHOLM, May 5 (Reuters) - Security services company Securitas reported on Wednesday a slightly smaller rise than expected in first-quarter profit as the slump in demand for airport security due to the COVID-19 pandemic held back group sales.
Operating profit at the Swedish provider of guard services, alarm surveillance and airport security rose 8% from a year earlier, to 1.03 billion crowns ($122 million). Four analysts polled by Refinitiv had on average forecast a 1.10 billion crown profit.
Securitas said cost cuts and pandemic-related extra sales of high-margin guarding services had supported profits.
Organic, or like-for-like sales were unchanged against 2% growth a year earlier and 1% growth in the fourth quarter. Securitas added that all its business segments managed to achieve organic growth in March, the last month of the quarter.
“Although we are seeing signs of commercial activity picking up throughout the group, the corona pandemic continues to hamper organic sales growth,” Chief Executive Magnus Ahlqvist said.
“The airport security business remains significantly negatively impacted, primarily in Security Services Europe, but we continue to improve profitability through contract reviews.”
COVID-19 and government restrictions to slow its spread practically drew air travel to a halt a year ago, and travel remains drastically reduced.
Securitas is pushing to increase its share of electronic surveillance. In the first quarter, that share was, however, unchanged from a year earlier at 22%.
Shares in the company were down 3% at 1203 GMT, while the wider market in Stockholm was up 2%.
Securitas’ main rival, Britain’s G4S, was bought recently by privately held U.S. rival Allied Universal. The merger between G4S and the private-equity backed group creates the world’s largest security company, before Securitas.
($1 = 8.4785 Swedish crowns)
(Reporting by Anna Ringstrom; editing by Niklas Pollard and Elaine Hardcastle)