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Swatch Group first-half 2015 net profit fell nearly 20 percent

Swiss watchmaker Swatch Group said on Thursday first-half net profit fell nearly 20 percent on a strong franc and negative interest rates, but was upbeat in its full-year outlook.

Switzerland’s export-reliant economy is hamstrung by its strong currency, which is particularly painful for firms such as Swatch which produce almost exclusively in the alpine nation.

Swatch Group said net profit for the six months stood at 548 million Swiss francs ($574.72 million), down from 680 million francs a year-ago. Sales rose 2.2 percent to 4.192 billion francs, hit by translating foreign sales back into Swiss francs, meaning Swatch sold more but earned less.

The firm said its strategy remained to manufacture in Switzerland, to gain market share, and to expand its retail network. It signalled it wouldn’t hike prices swiftly in order to protect profits.

“The group will maintain its long-term strategy of defensive price adjustment policy over short-term profit,” Swatch said in a statement. It said its outlook in all regions and segments remained “very good.” “Despite the Swiss franc dilemma, group management expects a strong second half 2015,” it added.

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