Richemont, the world’s number two maker of luxury goods, says it expects its annual profit to fall by more than a third due to losses on financial instruments. The Geneva-based group, which owns top global brands like Cartier, Piaget and IWC, also said its tax rate would rise considerably. “Compared to the previous financial year, Richemont’s net profit for the year ended March 31, 2015 is expected to show a decrease of some 36 per cent,” a statement said on Wednesday. &#
8220;This significant decrease reflects non cash, mark to market losses on financial instruments, which include monetary items and derivatives.
“The majority of such non cash losses are not subject to tax. Accordingly, the group’s effective tax rate for the year is expected to significantly increase,” it said.
Yet Richemont, which reports full results on May 22, said the losses “had no material impact on the… net cash position which amounted to €5.4 billion (A$7.46 billion) at the end of March.”
The company’s full year sales, excluding the results of Net a Porter, grew four per cent on a reported basis, and one per cent at constant currencies.
In March, Italian online fashion retailer Yoox bought Net a Porter in an all share deal.
Richemont said its operating profit for the year was expected to show a 10 per cent rise, including a gain on an investment property disposal.
AFP
