October 1, 2010 / 10:24 AM / 9 years ago

Swatch Group shares drop on CEO's currency warning

ZURICH, Oct 1 (Reuters) - Swatch Group UHR.VX shares fell on Friday with traders pointing to a warning from the chief executive of the world’s largest watchmaker about the negative impact of Swiss franc strength on profit.

Swatch shares were down 2.7 percent by 1004 GMT, making the stock the top loser in a slightly weaker STOXX 600 European personal and household goods index<0#.SXQP>.

“It hurts us that the Swiss franc appreciates because we produce nearly everything in Switzerland,” Swiss daily Blick quoted Nick Hayek as saying. In particular, the rise against the dollar was hitting margins, he said.

“If the franc rises by 10 centime against the dollar, this costs us 280 million (francs) ($286 million) ),” he told the paper.

The franc has risen 15 percent against the dollar this year to stand at 0.9782 per dollar, within sight of its record high at 0.9674 in early 2008.

Swatch shares have risen 40 percent this year and the group expects to post record sales in 2010.

For an ANALYSIS on the effects of franc strength on Swiss-listed companies, click on: [ID:nLDE66F1NE]

Reporting by Sven Egenter; Editing by Dan Lalor $1 = 0.9807 Swiss francs

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