Richemont H1 Net Profits Rise 10%

The company said it has no plans to dispose of any assets.

LONDON — First-half net profits at Compagnie Financière Richemont, parent of brands including Cartier, Van Cleef & Arpels, Alfred Dunhill and IWC, said profits climbed 10 percent to 1.19 billion euros, or $1.57 billion, on the back of a 4.3 percent gain in revenues.


In the six months to Sept. 30, revenues climbed to 5.32 billion euros, or $7.02 billion, with momentum coming chiefly from international demand for jewelry and specialist watchmakers.


All dollar figures have been converted at average exchange rates for the six-month period.


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The Americas region was the only one to post double-digit growth. It saw a 12 percent rise in the period, due to jewelry sales and the acquisition of Peter Millar in October 2012. Europe and the Middle East were up 8 percent, while Japan contracted by 8 percent, due to unfavorable exchange rate conversions.


Sales in the Asia-Pacific region grew by 1 percent, and accounted for 40 percent of the group total, with Hong Kong and Mainland China the two largest markets, the company said.


The region was led by “good growth” in Hong Kong and Macau, offset by lower sales in Mainland China, “largely reflecting prudent consumer sentiment after several years of exceptional expansion.”


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Looking ahead, Richemont’s chairman Yves-André Istel said that in the month of October, sales increased by 6 percent at actual exchange rates, with all regions reporting sales gains except for Japan, where double-digit growth in local-currency terms continued to be adversely impacted by foreign exchange rates. 


Richemont said that sales in the Asia-Pacific region grew during October, primarily due to “positive retail developments and exceptionally high jewelry sales.” It said that in all regions, retail sales were strong, outperforming the wholesale channel where re-order levels remain “cautious.”


In the second half, Richemont said that current exchange rates are likely to weigh on its reported results. Istel added that “the subdued overall environment, and in particular our continued investments for the long term, call for increased caution.”


Istel also said that Richemont has completed the review of its maisons, and that further investment in them will be made, “as in the past, to assure their long-term prosperity. 


“No disposals are under consideration at this time or for the foreseeable future. Richemont’s maisons will continue to pursue their differentiated strategies and planned long-term investment programs,” he said.