The world's biggest watch group Swatch said on July 28 that its first half net profits soared 24.5 percent to 579 million francs (503 million euros, $722 million), setting a fresh record for the company. Sales for the period also beat records previously set a year ago to reach 3.362 billion francs, up 11.4 percent.
"The outlook for the group in the second half of the year remains promising, particularly given the fact that July is confirming the trend in sales and results of the first half," said Swatch, best known for its eponymous plastic watches.
Weakness in Japan following March's earthquake and tsunami as well as the debt crisis in Europe was "more than offset by sales in other regions where the group operates," it said, noting that sales in its watches and jewellery segment were up 13.3 percent.
Its production segment, which makes movements and components not just for Swatch but also for third parties, posted record sales of 28.4 percent. "With order books full, the segment also expects a strong second half year," said Swatch.
Despite the upbeat forecast, the group acknowledged that the strong Swiss franc would "further negatively impact" its sales growth and net profit. For the first half, the franc had a negative impact of 387 million francs when compared to 2010 rates, said Swatch, which owns brands including Breguet, Omega and Blancpain.
Bank Helvea analyst Alessandro Migliorini issued a cautious reading of the results. While acknowledging the "strong set of figures," he pointed out that the strength of the Swiss currency will pose a challenge in coming months.