Arcadis numbers hit by Brazil and Middle East woes

Falling revenues in Latin America, the Middle East and Asia helped send overall income and profit down at Arcadis last year.

Turnover in the 12 months to December 2017 slipped 3% to €3.2bn (£2.8bn), down from €3.3bn (£2.9bn) with revenue from its Latin America operation nosediving 26% because of problems at its Brazil arm which saw the firm axe 400 jobs, around a third of staff, and spend close to £18m restructuring the business.

Revenue in the Middle East fell 10% after income from its operations in Qatar, Kuwait and Saudi Arabia slumped while revenues in Asia fell 2% mainly because of lower workloads in China – although its whole Asia Pacific region grew thanks to a strong performance from its Australia business.

The falls took their toll on profit with the Netherlands-based consultant seeing a 3% drop in earnings before interest, taxes, depreciation, and amortization to €200m (£178m), down from €207m (£184m) for 2016.

But there was better news from its UK business, where it is working on palns to build a new 60,000 seat stadium for Chelsea, seeing net revenue growth of 7% but operating margins at the business slipped from 10% to 9.2%which it blamed on high level of bidding activity.

Arcadis added the infrastructure and water sectors remained strong in the UK while revenue growth in buildings was being underpinned by commercial developers and automotive clients

Arcadis said it has drawn a line under the sort of high-profile deals which saw it buy EC Harris back in 2011 and pick up Hyder three years later to focus on organic growth.

But chief executive Peter Oosterveer said it was still after specific deals to beef up its digital and data business which saw it buy Chicago-based tech firm E2 ManageTech last July and Sheffield-based software and analytics firm Seams last month.

Oosterveer added that it was still deciding whether to sell off its architectural business CallisonRTKL, which accounts for 10% of its global income.

The firm, which has an office in London, was formed out of the merger of Arcadis subsidiaries Callison and RTKL Associates in October 2015 and employs 1,700 people across 23 offices worldwide.

In a note accompanying its result, Arcadis added: “While a final decision has not been made yet, the process is on track, and we have started a market consultation to assess the viability of a sale.”

Arcadis also said it racked up €25m (£22m) of costs last year, mainly on its Brazil restructure, while it also booked a £4.4m cost on acquisitions and selling its Brunei business.

The firm’s net debt decreased by 16% to €416m (£369m) in 2017, down from €494m (£438m) the previous year.