VIENNA (dpa) – Swiss watchmaking giant Swatch said Thursday that last year’s net profit dropped 26.6 per cent to 1.4 billion Swiss francs (1.5 billion dollars) owing to its expansion policy and to a factory fire.
The world’s largest watchmaker said its brands that include Omega and Tissot collected revenues worth 8.7 billion francs, 3 per cent more than in 2013.
At the same time, Swatch increased its marketing spending in the growth markets of the United States, Japan and China in the second half of the year, following its sponsorship of the Sotchi Winter Olympics in the first half.
The company also boosted its investment in production facilities and retail stores.
In addition, a fire at a watch movement factory cost 200 million francs in sales and raised production costs.
As a result of these factors, Swatch’s operating profit fell 24 per cent to 1.8 billion francs.
Following the earnings announcement, Swatch shares dropped 4.49 per cent on the stock exchange in Zurich.