Richemont warns of profit plunge
Swiss corporate luxury retailer Richemont has warned of a 36 per cent plunge in net profit in the year to March 31, blamed on “derivatives”.
The loss comes despite a 10 per cent improvement in operating profit and capital gains on the disposal of assets.
“This significant decrease reflects non-cash, mark-to-market losses on financial instruments, which include monetary items and derivatives,” the company said. It also warned its tax rate would increase significantly.
Richemont owns Van Cleef & Arpels, watchmakers Piaget and IWC and fashion brands, including Shanghai Tang.
Further details will be revealed when the company reports its full results on May 22. Investors need not be too concerned, however: the company is sitting on cash reserves of around €5.4 billion.