Swiss luxury goods conglomerate Richemont led by South African billionaire Johann Rupert has announced a record-breaking financial performance at the end of its 2023 fiscal year, as its profit surged to all-time highs thanks to the rebound in sales in China following the end of the country’s Zero Covid-19 policies.
According to Richemont’s FY 2023 financial report, the group posted a profit of €3.91 billion ($4.25 billion), up 60 percent from €2.45 billion ($2.67 billion) recorded in 2022, when its earnings surged above $18 billion.
The remarkable achievement was driven by a 19-percent increase in the group’s revenue from €16.75 billion ($18.2 billion) in 2022 to €19.95 billion ($21.7 billion), propelled by the strong rebound in the group’s sales in Asia Pacific, and supported by double-digit increases in sales in all other regions, led by Japan and Europe.
What Rupert is saying about Richemont’s financial performance
Commenting on the financial performance, Rupert, Richemont‘s chairman, said the company’s brands are well-positioned to meet strong demand driven by the resumption of travel by customers from China.
Rupert, the richest man in South Africa, explained that Chinese consumers have been cautious about spending following the end of COVID-19 rules and that the company does not expect demand there to rebound as strongly as the U.S. demand did after the end of pandemic measures.
He added that while individuals from China are traveling again, large group trips haven’t yet recovered amid high flight costs and that the United States is at risk of a downturn as the country will go through a credit contraction.
Rupert’s Richemont unveils plans to boost shareholder value
As part of the move to further create value for investors, Richemont has announced plans to buy back as many as 10 million A shares, representing 1.7 percent of the company’s capital.
The shares, which will be held in treasury to hedge awards to executives and employees under the company’s long-term incentive plan, are worth CHF1.5 billion ($1.68 billion) at the time of writing.
In an effort to reward shareholders, Rupert, and other board members of Richemont, have proposed a dividend of CHF2.50 ($2.72) per 1 Class A share/10 B shares and an additional special dividend of CHF1.00 ($1.09) per A Share/10 B shares.
