Bulgari reports £6.4m net loss in H1

Company shows signs of recovery as turnover & operating profit soar.

Bulgari has reported a £6.4 million net loss in H1 2010, a decrease from the £33.5 million loss reported in the same period last year.

The improvement stemmed from an eight percent increase in turnover to €443.3 million (£336.5 million) and an increase in operating profit in H1 to €12.3 million (£10.2 million), from minus €32 million (£26.5 million) in the first half of 2009.

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Total operating costs also dropped by 4.3 percent to €221.6 million (£183.2 million) for the same period.

Sales in America showed the biggest increase, more than doubling with growth of 52.4 percent. The Asian market (without Japan) was also strong, rising by 21.4 percent, and sales in Europe improved slightly by one percent.

Japanese sales remained weak, with a drop in performance of four percent, and the Middle East/Other regions also saw a decline of 5.1 percent, though the Middle East alone saw a 6.1 percent increase in sales on H1 2009.

By product category, jewellery sales in the first half showed an improvement of 10.5 percent at comparable exchange rates on H1 2009, with watches sales the only category to decline at minus 4.6 percent. Yet, Bulgari has stated that if it eliminating sales of Roth and Genta brand watches, no longer in stock, and sales of the watches exhibited at Basel (delivered in the second quarter in 2009 this year to be delivered in the third quarter), the watch category grew by 14 percent.

The Group’s net financial indebtedness on June 30 2010 amounted to €290.2 million (£240 million), compared to €216.8 million (£179 million), on December 31 2009, and €351.6 million (£290.8 million) on June 30 2009, falling by 17 percent year on year.

Bulgari Group chief executive Francesco Trapani said: “I am pleased with the results achieved by the Group in the first half of the year, as they are in line with our forecasts and they confirm the validity of the strategies adopted and focused, on one hand, on cost containment and, on the other, on investment in our creativity and in the growth opportunities offered by the market.

“In light of July sales trends, I think it is reasonable at this time to confirm the validity of the ‘mid single digit’ growth guidance at comparable exchange rates for the yearly turnover, which we had already provided to the market, though I do hope that all the initiatives already in place and set to continue for the rest of the year will allow us to beat the guidance."



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