* Q2 EBIT down 81 percent, still beats expectations
* Net loss worse than expected
* Ups 2009 cost savings to 75 million euros, outlook unclear
* Shares gain 5 percent
(Adds interim CEO, analyst comments, shares)
By Reed Stevenson
AMSTERDAM, July 24 (Reuters) - Dutch company USG People, hit by dwindling demand for staffing, reported an 81 percent drop in second-quarter operating income and said it did not expect a significant market improvement in the second half.
Earnings before interest, taxes and amortisation (EBITA), which excludes restructuring and other costs, came in at 12 million euros, which nonetheless beat analysts' average forecast for 9.8 million and helped lift shares by as much as 5 percent.
"We saw some stabilisation in the decline in revenue in the last few months," Rob Zandbergen, finance director and interim chief executive, said in a statement on Friday. The company did not provide a financial outlook for the second half.
The Almere, Netherlands-based company reported a net loss of 6 million euros compared with an expected 3.9 million euros loss. Adjusted for restructuring and interest rate derivative expenses, USG People said it made a profit of 1 million euros.
Shares in USG People were up 4.8 percent at 8.8 euros, while the DJ Stoxx industrial goods and services index was flat, by 0810 GMT .
"The reason (for the share rise) is primarily related to the drastic cost measures which have been taken in earlier quarters," said Petercam analyst Thijs Berkelder, noting that EBITA had improved sequentially despite tough conditions.
TOO SOON TO CALL RECOVERY
Other staffing companies have also been reluctant to forecast conditions for the remainder of 2009, saying that demand for professional staffing services remained weak with companies cutting jobs or keeping staffing at a minimum while trying to cope with a weak business climate.
Michael Page, Britain's second-largest recruiter, said earlier this month that it had seen a stabilisation in some markets but that it did not expect a firm recovery until next year.
U.S. staffing services giant Manpower also said it was too soon to call a real recovery despite improvements in its major markets, while industry leader Adecco said that things could get suddenly worse again in its key French market.
USG's second-quarter sales fell 31 percent to 722 million.
With monthly staffing sales down by double digits from last year -- 22 percent in June -- USG has renegotiated debt terms to maintain its financial strength while cutting costs.
USG People reported that its net debt position stood at 333 million euros at the end of June, and that it met its bank covenants for the quarter. Earlier in July, USG had secured changes to it debt agreements and cut debt by 50 million euros as it sought to improve its balance sheet.
USG People also raised its cost savings outlook, saying restructuring efforts would translate into 75 million euros in annual cost savings in 2009, up from 60 million euros.
The second-largest jobs company in the Netherlands said earlier this month that chief executive Ron Icke was resigning due to differences in opinion over strategy and Zandbergen would take over on an interim basis. ($1 = 0.7030 euro) (Editing by Dan Lalor and Marie Maitre)