Richemont earnings growth ebbs on Chinese market slowdown
Richemont, the maker of Cartier jewellery and Montblanc pens, reported little changed full-year earnings, after three years of growth, as China cracked down on extravagant spending among government officials.
Operating profit was 2.42-billion euros ($3.3-billion) in the 12 months through March, the Geneva-based luxury-goods maker said on Thursday in a statement. The company, which had cash of 4.66-billion euros at the end of the period, said it plans to raise its dividend 40% to 1.40 francs a share, exceeding the Bloomberg forecast of 1.15 francs.
“The dividend was the positive in the results,” Rey Wium, an analyst at Renaissance Capital in Johannesburg, said by phone. “The company had to do something with the cash.”
Richemont got 40% of its sales from the Asia-Pacific region. Sales in mainland China dropped, while revenue growth in Richemont’s Europe unit moderated to a “high single-digit” growth rate.
Johann Rupert, the South African billionaire who is Richemont’s controlling shareholder, plans to stand for election for the post of chairperson when he ends his yearlong sabbatical in September, Richemont said.
Revenue gained 5% to 10.7-billion euros. Exchange- rate shifts such as the weakening of the dollar to the euro stripped 5 percentage points off sales growth. Sales in April rose 6% excluding currency fluctuations.
The stock has gained 8.7% in the past year, giving the company a market value of 50-billion Swiss francs ($56 billion).