Swiss luxury goods group Compagnie Financiere Richemont AG reported Friday significantly higher profit in fiscal 2022 with strong growth in demand. The company also lifted its dividend, and announced a special dividend. Meanwhile, the shares were losing around 12 percent in the morning trading in Switzerland.
Looking ahead, Chairman Johann Rupert said, “Even if the worst of Covid is hopefully behind us, we face a global environment which is the most unsettled we have experienced for a number of years. .. Richemont’s €5.3 billion net cash position at the end of March 2022 is a source of strength as we face volatile times ahead.”
Reuters reported that the company issued a cautious note over growth in China, and also failed to report any meaningful progress in talks regarding online retail business YOOX Net-a-Porter or YNAP.
Further, the Board proposes to pay an ordinary dividend of 2.25 Swiss francs per ‘A’ share, and 0.225 franc per ‘B’ share, an increase of 13 percent over the prior year. The company also proposes an additional special dividend of 1.00 franc per ‘A’ share/10 ‘B’ shares, subject to shareholders’ approval at the Annual General Meeting on September 7.
For the year, profit climbed 61 percent to 2.08 billion euros from last year’s 1.29 billion euros. Earnings per share grew 57 percent to 3.611 euros from 2.296 euros a year ago.
Operating profit more than doubled to 3.39 billion euros, delivering improved operating margin of 17.7 percent, compared to last year’s 11.2 percent.
The company noted that suspension of commercial activities in Russia resulted in 168 million euros negative operating result impact.
Sales during the year were 19.18 billion euros, a 46 percent increase over last year’s 13.14 billion euros, led by retail and the Americas. All Maisons, channels and regions achieved double-digit growth. Sales went up 44 percent at constant exchange rates
On a two-year comparative basis, sales climbed 35 percent.
In the year, Jewellery Maisons recorded 49 percent sales growth and 34.3 percent operating margin, up from 31 percent last year. Specialist Watchmakers’ sales grew 53 percent and Online Distributors’ sales grew 27 percent.
Americas’ sales climbed 79 percent, and sales in Asia Pacific rose 32 percent, with mainland China sales growing by 20 percent compared to the prior year.
The company noted that the strong European client base more than offset subdued inbound tourism, leading to a 51 percent sales increase. In the Middle East and Africa, sales grew at a similar pace, surpassing Japan as the fourth largest market, where sales rose 28 percent.
In Switzerland, Richemont shares were trading at 93.06 Swiss francs, down 11.87 percent.
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