Richemont warns of lower 2014-15 profits
Geneva-based Richemont, the world's number two maker of luxury goods, said Wednesday it expected its annual profit to fall by more than a third due to losses on financial instruments.
The company, which owns top global brands like Cartier, Piaget and IWC, also said its tax rate would rise considerably.
Richemont said its results for the year ended March 31st were impacted by losses on financial investments, including “monetary items and derivatives”.
Because the majority of such non-cash losses are not subject to tax, the group’s effective tax rate is expected to “significantly increase,” it said.
Yet Richemont, which reports full results on May 22nd, said the losses "had no material impact on the . . . net cash position which amounted to €5.4 billion ($5.8 billion) at the end of March."
The company reported a net profit of €2.07 billion for the 2013-14 year.
Richemont's full-year sales, excluding the results of its Net-a-Porter unit, grew four percent on a reported basis, and one percent at constant currencies.
Last month Italian online fashion retailer Yoox bought Net-a-Porter in an all-share deal.
Richemont said its operating profit for the year is expected to show a ten percent rise, including a gain on an investment property disposal.
Following the announcement, Richemont shares fell 1.5 percent in mid-morning trading on the Swiss stock exchange.