Swatch Group says first-half net profit up 8.6 percent

The Swatch Group, which includes the Swatch, Omega and Longines brands, said Thursday that profits for the first half of the year were SFr139 million ($90.8 million), up by 8.6 percent over the same period last year.

The Swatch Group, which includes the Swatch, Omega and Longines brands, said Thursday that profits for the first half of the year were SFr139 million ($90.8 million), up by 8.6 percent over the same period last year.

A communiqué from the group’s headquarters in Biel said sales were up by 6.7 percent to SFr1.617 billion ($1.06 billion).

It added that due to stronger July sales and the August forecast, the management considered the chances good for a further positive development for the year as a whole.

Sales of finished watches went up by almost ten percent in the first half. All price segments showed increases.

This, says the Swatch Group, is all the more remarkable since, according to the official customs’ statistics, Swiss watch exports as a whole registered a slight decrease of 0.1 percent.

But sales of movements and components, with Swatch also being a supplier to external clients, decreased by SFr81 million ($54 million) or 12.4 per cent, passing from SFr653 million ($435 million) to SFr572 million ($381 million).

The Swatch Group says the market development of low-cost watch movements influenced this sector considerably.

Due to the strong development in its core business, the group increased its operating results by almost 50 percent in the watch sector, while the production sector of watches, watch movements and watch components suffered losses of SFr10 million ($6.6 million).

Steps have been taken to improve the results of this sector and they will be effective by the end of 1999, the communiqué said.

The group believes the launch of new products by its various watch brands promises a strong growth during the second half-year. Traditionally, this period is more important due to usually increased sales months and the Christmas sales.

Based on the present evaluation of the foreign currencies’ situation and the economic environment, the Swatch Group expects a further improvement of its results for 1999 over the previous year.

From SRI staff.