SGS, the Geneva-based global testing, verification and certification firm, has announced a 41 per cent rise in net annual profit to SFr224 million ($182 million).

Analysts welcomed the result as a clear sign that the firm was overcoming its management difficulties of recent years.

Earnings per share in 2003 rose by 43 per cent to SFr29.24, buttressing SGS’s previous promise to investors that it would generate earnings of SFr45 a share by 2005.

“This is not withstanding the recent weakness in the US dollar and currencies which trade in tandem,” the company said in a statement.

“Although we are of the view that this weakness will persist and perhaps even accentuate over the short term, the medium to long-term view is that a more balanced exchange rate will ultimately be established.”

Stocks in SGS were steady on Thursday at around SFr767 per share, with some analysts saying there was disappointment that the company did not provide more news about its expansion strategy.

Turnaround

Founded in 1878, SGS offers testing services around the globe to industries such as oil and gas, and agriculture.

Sergio Marchionne, the SGS chief executive, was brought in during 2002 to turn around the struggling firm which was racked by boardroom infighting.

He has said that the turnaround is largely complete - a sentiment shared by stock markets, which have seen SGS shares triple since his appointment.

Ronald Wildmann, an analyst at Bank Leu, said: “SGS had very good figures although in line with expectations."

“There was strong organic growth although the operating margin was maybe a bit lower than expected”.

SGS reported operating income of SFr300 million.

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