Oriental Watch (398) H2 2025 earnings summary

Executive summary

• Revenue declined 5.2% year-over-year to HK$3,450 million due to macroeconomic headwinds, including geopolitical tensions, interest rate volatility, and a property sector slump impacting luxury demand.

• Gross profit fell 5.6% year-over-year to HK$1,086 million, with gross margin slightly down to 31.5%.

• Profit attributable to owners dropped 20% year-over-year to HK$200 million, mainly due to a one-off impairment charge of HK$25 million and higher operating costs; adjusted profit excluding this charge was HK$225 million.

• Final dividend proposed at 4.2 HK cents per share and special dividend at 12.5 HK cents per share, both lower than the previous year.

Financial highlights

• Revenue: HK$3,450 million (down 5.2% year-over-year).

• Gross profit: HK$1,086 million (down 5.6% year-over-year); gross margin: 31.5%.

• Net profit: HK$200 million (down 20% year-over-year); adjusted net profit: HK$225 million.

• Basic EPS: 41.14 HK cents (down from 51.40 HK cents).

• Total equity: HK$1,755 million as of 31 March 2025.

• No bank loans outstanding; gearing ratio remains nil.

Outlook and guidance

• Ongoing market uncertainty expected to continue affecting the luxury watch industry in the second half of 2025.

• Swiss watch exports to Mainland China and Hong Kong declined further in Q1 2025, indicating persistent industry challenges.

• Focus remains on optimizing store network, operational efficiency, and prudent cost management.

• Board remains committed to balancing growth, premium service, and sustainable shareholder returns.