Swatch Group AG, the world’s biggest watchmaker, reported annual profit increased 35 percent as bankers spent bonuses on its most expensive timepieces, including the Breguet and Omega brands, Zee News reports.
Net income after minorities climbed to 827 million francs ($687 million) from 614 million francs in 2005, the Biel, Switzerland-based company said in an e-mail today. The company plans a 400 million-franc share buyback.
Swatch Group had an “excellent start” to 2007 and expects another “very promising” year with an increase in profitability and further sales growth, the company said in the statement. Sales in 2006 gained 12 percent to 5.05 billion francs, Swatch Group said in January.
Demand was helped by rising spending power in India and China. Geneva-based Cie. Financiere Richemont AG, which makes Cartier and Mont Blanc watches, in January reported a 10 percent increase in fiscal third-quarter sales, as sales in Asia excluding Japan gained 13 percent.
Swiss watch exports to Hong Kong, the industry’s second-largest market and a point of sale for Chinese consumers, jumped 21 percent to 155 million francs in January, according to the Federation of the Swiss Watch Industry.
Registered shares of Swatch Group have gained 13 percent this year, eclipsing the 5 percent slide by shares of Richemont and 1 percent gain by the Merrill Lynch Luxury and Lifestyle Index.
Swatch Group’s profit beat the median estimate from 11 estimates surveyed by Bloomberg of 785 million francs.