Cartier-owner Richemont warned on Wednesday its net profit for the year ending March 31 would drop by 36 per cent, blaming losses on financial instruments including derivatives.

“This significant decrease reflects non-cash, mark-to-market losses on financial instruments, which include monetary items and derivatives,” Richemont said, adding its tax rate would also significantly increase.

Nobody at Richemont was immediately available to provide more detail.

The group, which also owns jeweller Van Cleef & Arpels, watchmakers Piaget and IWC as well as several fashion brands, said its operating profit for the year was expected to rise 10 per cent, including a gain on an investment property disposal.

Last month, Richemont agreed to sell its online fashion retailer Net-a-Porter (NAP) to Italian rival Yoox in an all-share deal. The group would get a 50 per cent stake in the combined entity but its voting rights will be capped at 25 per cent.

While NAP contributed little to the group in terms of profit, it helped boost the group’s growth rate.

Richemont said that including Net-a-Porter, its full-year sales to March 31 would have increased by 5 per cent and by 2 per cent at constant currencies, but excluding the online retailer, they rose 4 per cent on a reported basis and 1 percent at constant currencies.

Richemont’s cash pile at the end of March stood at €5.4 billion.

The Swiss group reports full-year results on May 22.

Reuters