Swatch's net profit drops 28 per cent

The world's biggest watchmaker Swatch Group said yesterday that first half net profit had dropped by 28 pe rcent to 301 million Swiss francs (€196.9 million).

Swatch said in a statement that there were already clear signs of a recovery in sales, which fell by 16 per cent in net terms compared to the first six months of 2008 to 2.35 billion Swiss francs.

However, operating profit dipped by 41 per cent to 345 million francs, as the company sought to sell off stocks.

Swatch's net profit was above analysts' expectations of an average 270 million Swiss francs profit, polled by the business news agency AWP.

Chief executive officer Nick Hayek had already signalled that he expected a pickup in sales in the second half of 2009.

"This positive trend has been clearly confirmed in July 2009," the group said yesterday, forecasting sales in the second half comparable or, for some brands, above the levels recorded in the same period last year.

Net sales over the whole of 2008 reached 5.68 billion Swiss francs, dampened by a sharp rise in the Swiss franc against major currencies.

Swatch Group's share price leaped ahead by 8.81 per cent at the opening of trading on the Swiss Market Index, to 228.6 francs.