Profits at Richemont Group plunged by 36 percent in the 12 months to March as the Swiss luxury giant wrote down euro deposits as the currency plummeted in value last year.
The home of Cartier, IWC and Montblanc watch brands told financial analysts that the result was down to the change in the market value of its euro holdings, reported in Swiss francs, compared to the previous year.
Although the drop in profit was viewed in financial circles as broadly a technicality, it provided further evidence of the turmoil caused by the Swiss National Bank’s surprise decision to allow the franc to trade freely with the euro.
The announcement from Richemont was an interim report. The group’s full year results are expected in May, and will show world-wide revenue and profits performing well, despite growth from China all-but evaporating.
The annual report is expected to confirm global sales rose by 5%, with operating profit up around 10%.