Swatch Group, the umbrella company for leading brands in the watchmaking industry, released its first half results for 2015, reporting a profit drop of nearly 20 percent.
The group claims that a stronger franc, accompanied by negative interest rates, drive this drop of 19.4 per cent, but says it has a positive outlook for the second half of the year, which will see the launch of several new products announced earlier this year.
Earlier this year, the Swiss National Bank announced the removal of the cap previously placed on the value of the franc. This led the currency to rise sharply, which negatively impacted the economy that is heavily reliant on exports.
On the other hand, the group reported an increase of 3.6 per cent in it net sales, which reached 4,248 at constant exchange rates, representing a growth of 18.7 per cent.
The watches and jewellery segment of the business, including production, reportedly rose 3.4 per cent, despite a 1.1 per cent drop in Swiss watches recorded at the end of May.
Despite the extraordinary changes and the current franc dilemma, the group has a positive outlook for all its segments and regions, and stated that it would keep its “long-term strategy of defensive price adjustment policy over short-term profit”.