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Monster.ie's parent company, TMP Worldwide, posted weak results on Tuesday and announced further restructuring due to continuing weakness in the sector.
Net income for the company rose 11 percent in the first quarter, but this is a reflection of on-going restructuring, rather than increased business. TMP said that total fees and commissions have declined by 23 percent from this time last year.
TMP has also announced plans to close 80 offices and cut 525 of its 10,000 employees worldwide. No layoffs are expected in Ireland, where Monster.ie employs 12 people and TMP Executive Resourcing employs 24 people. TMP Executive Resourcing is currently recruiting a country manager for its offices in Dublin.
"The recruitment sector is closely tied to key economic indictors," commented Alan Townsend, managing director of Monster.ie. "Revenues from recruitment are unlikely to recover until we see an improvement in the US economy."
TMP announced diluted adjusted earnings per share of USD0.14 for the first quarter ended 31 March 2002 compared with USD0.22 for the first quarter of 2001. Including merger and integration costs, TMP reported diluted earnings per share of USD0.06 per share for the first quarter of 2002, compared to USD0.09 per share for the prior year period. Earnings were in line with analysts' expectations.
Total fees and commissions declined by almost 23 percent to USD290.8 million for the quarter, down from USD377.2 million in the first quarter of 2001. The firm's adjusted operating profit margin decreased to 8.6 percent for the quarter, compared to 9.7 percent for the same period last year.
Adjusted net income for was USD15.6 million, compared to USD24.8 million for the prior year period, a decline of 36.9 percent.
TMP said it expects to take a pre-tax restructuring charge of approximately USD75 million in the second quarter. The restructuring is a result of TMP's attempts to integrate its services, integrate businesses previously acquired, lower costs and improve profitability, the US-based recruitment firm claimed. As a result of the restructuring initiative, TMP anticipates annualised pre-tax cost savings of USD30 million in 2002 and USD50 million in 2003.
"The restructuring reflects our efforts to integrate our advertising, communications and recruitment sectors," said Townsend. Townsend also believes that the long-term trends in recruitment are working in Monster.ie's favour. "Cost of hire is now one of the biggest issues for human resource managers and Monster.ie is a cost efficient way to hire." Monster.ie had its highest ever number of hits in April, up by 90 percent from the previous April and up 24 percent from January, one of the key months for recruitment.
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