Richemont sees profit plunge, but shares surge

Richemont on Friday posted a sharp drop in first half net profit amid weaker demand in China, but saw trading bolstered on a market bracing for worse. The world's second largest maker of luxury products after LVMH saw its net profit plunge 23 percent during the first half of its 2014/2015 fiscal year to 907 million euros (1.12 billion). Analysts polled by the AWP financial news agency had expected to see a net profit of 1.08 billion euros for the six-month-period. Richemont also beat expectations on sales, which inched up two percent to 5.43 billion euros, surpassing the 5.3 billion anticipated by analysts. The company explained the slide in net profit with a four-percent drop in operating profit, as costs outpaced sales revenue, and the overall negative impact of exchange rates. Richemont said it had lost 239 million euros on programmes aimed at reducing the risk of currency fluctuations. Following the news, the company's share price jumped 4.04 percent to 83.75 Swiss francs a piece on a slightly negative Swiss market.