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Ebb in tourism dries up Swatch profits

dpa logodpa 2/02/2017

Swatch saw its profit drop by 47 per cent last year as tourists stayed away from Europe.

Swatch saw its profit drop by 47 per cent last year as tourists stayed away from Europe because of terrorist attacks, visa requirements and sanctions, the major Swiss watchmaker says.

The group that includes brands such as Omega, Rado and Tissot made a net profit of 593 million Swiss francs ($A779 million) in 2016.

Sales fell to 7.6 billion francs, which was 10.6 per cent less than in the previous year, Swatch said at its Swiss headquarters in Biel.

Earnings were affected by the attacks in France, Belgium, Germany and Turkey.

In addition, fewer Chinese tourists came to Europe after biometric visas became a requirement for entry into the EU Schengen area.

EU and US sanctions against Russia because of the Ukraine conflict "led to a massive reduction of visitors from this region" in Europe, the company said.

Swatch's production of watch components for other manufacturers also dropped, as these clients sharply reduced their orders in reaction to the lower consumer demand.

Swatch's operating profit plummeted by 44.5 per cent to 805 million dollars. Factories were running below capacity, and Omega's sponsorship of the Olympic Games in Rio de Janeiro dragged down the result even further.

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