The Swiss giant in the manufacture of watches Swatch half-year profit decreased with 8.8% in 2014. That is the worst half-year financial statement in the last 5 years of the company management. The results in the period from January to June are heavy high rate of the CHF and temporary production problems due to a fire in one of the plants.
For the first half of 2014 operating profit Swatch declined by 8.8% to 830 million CHF (924 million USD). The expectations of the analysts was to index stood at 849.50 million CHF. The net profit for the period has shrunk to 680 million CHF, which is slightly less than analysts expected 690 million CHF. During the first six months of 2014 the company’s revenue grew by 2.4% annually to 4.1 billion CHF. The negative effect of expensive CHF reduced revenue by 188 million CHF. The reason is that the average rate against the USD was 4.9% higher than the first half of 2013.
The results of Swatch reflects fluctuating demand for watches the high-end of the very important Chinese market for the company. The problems come because of the ban on receiving expensive gifts from state employees, which negatively affects the company.
Today, the shares of Swatch dropped by 1% to 508.50 CHF in Zurich stock exchange.