Richemont profit up 22% in first half - (Panerai and Jaeger-LeCoultre) >

21 november 2006

  Richemont profit up 22% in first half - Hugo Miller 2006-11-18

Richemont profit up 22% in first half Hugo Miller 2006-11-18 CIE Financiere Richemont AG, the world's second-biggest luxury-goods company, said fiscal first-half profit increased 22 percent on sales of Panerai and Jaeger-LeCoultre watches and Mont Blanc pens and jewelry.

Net income rose to 645 million euros (US$823 million) in the six months through September from 529 million euros a year earlier, the Geneva-based company said yesterday in a statement, Bloomberg News reported. That beat the 615 million-euro median estimate in a Bloomberg survey of seven analysts.

"Profit was clearly better than we expected," with gains at all of Richemont's units, said Claudia Lenz, an analyst at Bank Vontobel in Zurich with an "outperform" rating on the stock. "Mont Blanc used to be about pens and now has a name in jewelry and watches and very good margins."

Under Norbert Platt, who headed Mont Blanc before becoming chief executive officer in 2004, Richemont has sold clothing brands and used the proceeds to buy watch makers that are developing new timepieces for wealthy Asians and Americans. The firm, whose watch brands include IWC, last month bought Fabrique d'Horlogerie Minerva, a maker of mechanical watch movements started in 1858.

First-half revenue climbed 16 percent to 2.3 billion euros, said Richemont, the maker of Cartier jewelry, Dunhill leather goods and Purdey firearms. The median analyst estimate was 2.29 billion euros. Watch revenue gained 14 percent to 597 million euros, and jewelry sales climbed 13 percent to 1.17 billion euros.

While sales growth slowed to 11 percent in October, "I remain confident that the group's performance for the year as a whole will be significantly ahead of last year," Executive Chairman Johann Rupert said in the statement.