April 21, 2016 / 6:36 AM / 2 years ago

UPDATE 1-Engineering firm Arcadis' Q1 core earnings hurt by Brazil recession

* Q1 earnings 46.6 mln euros vs estimates for 50.9 mln euro

* Conditions difficult in North America, emerging markets

* Internal probe in Brazil finds no evidence of wrongdoing (Updates with earnings details, Brazil investigation)

By Toby Sterling

AMSTERDAM, April 21 (Reuters) - Dutch engineering company Arcadis posted a 9 percent fall in first-quarter core earnings to 46.6 million euros ($52.6 million) and warned of continuing difficult business conditions in North America and in emerging markets.

Analysts polled for Reuters had expected the company to make first-quarter earnings before interest, taxes and amortisation (EBITA) of 50.9 million euros.

“The deep recession in Brazil drove revenues lower and impacted our overall results,” Chief Executive Neil McArthur said in a statement. “In North America, we saw increased competition with related price pressure, especially in the Environment business.”

It warned in February that it expected difficult conditions in North America, which contributes almost half of its revenue.

However, European markets continued to strengthen. It said its 2016 priorities are improving operating earnings and delivering a strong free cash flow, barring unforeseen circumstances.

Arcadis also said an internal investigation into possible fraud at a Brazilian water management project found no evidence of any wrongdoing on its part.

In December, the company said it was cooperating with Brazilian police as part of an investigation into suspected misuse of funds at a $6.4 billion water management project in northern Brazil.

Arcadis’ offices were raided but it has not been charged or named as a suspect.

It said on Thursday it had widened its own investigation to look at how it handles several other Brazilian projects.

“As part of this assessment Arcadis identified specific compliance-related findings,” it said. “Arcadis is following up these findings with appropriate measures, including project and process reviews and enhanced (employee) training programmes.” (Reporting by Toby Sterling; Editing by Biju Dwarakanath and Susan Thomas)

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