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Hermes reports half-year profit leap

French luxury brand Hermes said on Wednesday its half-year net profit soared 50 percent to $290.9 million ($420 million), with its operating margin widening to 32 percent.

The company said that sales rose by 22.0 percent at current exchange rates to €1.3 billion, or 21 percent at constant exchange rates.  

The luxury group confirmed its target for annual sales growth at constant exchange rates of 12-14 percent, with operating margin remaining at the level of last year.  

It’s share price was stable in morning trading in a Paris market up nearly 1.7 percent.  

Hermes, which was seen as a takeover target by luxury conglomerate LVMH that has amassed a 21.4 percent stake, reaffimed its intention to remain independent.  

“Hermes will not deviate from its long-term strategy of maintaining control over its know-how and distribution network,” it said in a statement.

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BUSINESS

Air France reports €1.2 billion loss for 2012

Air France-KLM reported on Friday a net loss of 1.2 billion euros, worse than a loss of 809 million euros in 2011, but said that underlying prospects were improving despite heavy fuel and restructuring costs.

Air France reports €1.2 billion loss for 2012
File photo of an Air France airplane. Photo: Kentaro Iemoto

Air France-KLM has suffered from a fall of competitiveness in recent years, under the pressure of low-cost operators and the rise of airlines in the Middle East and in Asia.

In January of last year, the company announced a vast restructuring plan called "Transform 2015."

The group cut its operating loss in 2012 to 300 million euros from a loss of 353 million euros in 2011. This was better than the average figure expected by analysts polled by
Bloomberg financial agency of a loss of 334.6 million euros.

In the fourth quarter of last year, the operating loss was reduced to 143 million euros from 202 million euros 12 months earlier. Net debt, which weighs heavily on the group, fell by 540 million euros to slightly less than 6.0 billion euros.

Sales rose by 5.2 percent to 25.6 billion euros.

Financial director Philippe Calavia said that 2012 was an important year for the group because decisions about the structure and transformation of the company had been taken.

In January, The Local brought you the story of Air France's latest venture, Hop! – a new low-cost airline designed to challenge the dominance of Ryanair and easyJet.

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