Watchmaking giant Swatch driven by sales boom
Swiss watchmaking giant Swatch on Wednesday reported a 54.5 percent increase in its first half net profit as sales boomed to record levels for the period, straining its production capacity.
Net profit over the first six months of the year reached 465 million Swiss francs (338 million euros, 448 million dollars), the group said as it released its financial results two weeks ahead of schedule.
Core watch and jewellery sales grew by 30.6 percent to 2.4 billion francs compared with the first half of 2009, while overall gross sales grew 22.2 percent to 3.03 billion francs with the improving economic climate.
"This even exceeds sales for the first half of 2008 and represents a new record for the Swatch Group," the company said in a statement.
First half net sales grew 22.1 percent to 2.87 billion Swiss francs.
Volatile exchange rates with the strong Swiss franc cut about 1.9 percent from the sales figure, it added.
Swatch nonetheless said it faced a "major challenge" in swiftly overcoming production bottlenecks that are already starting to occur in some areas of the company's output.
"Growth has been solid in July, and we expect a strong result for the second half of 2010 in terms of both sales and profit," the company predicted.
Swatch's founder and inspirational chairman Nicolas Hayek died suddenly on June 29. He has since been succeeded by his daughter Nayla Hayek, who was previously a member of the board.
Hayek senior, 82, died of heart failure while at work at the company he transformed into the world's biggest watchmaking group, englobing classic brands such as Breguet, Blancpain, Longines, Omega and Tissot as well as the affordable and colourful Swatch.
© 2010 AFP