The world's largest watchmaking group has announced that its first-half net profit dropped by less than analysts' expectations to SFr301 million ($280.8 million).

This compares with SFr418 million for the same period last year, a decline of 28 per cent. A Reuters poll of analysts had expected a first-half profit of SFr275 million.

The Swatch Group, which includes luxury brands such as Breguet and Omega, as well as Longines, Tissot and Swatch, forecast that demand for its timepieces would pick up in the second half of the year.

A statement said the main growth driver in the coming months would continue to be the improving sales in most of the countries where demand should pick up with the anticipated weakening of the recession.

The group, which is based in Biel, said the first half was marked by a very challenging environment with a drop in demand and a declining consumer confidence worldwide.

But it said the company was much more resistant to this negative development than the rest of the industry.

Sales slipped 15 per cent to SFr2.48 billion, outperforming Swiss watch exports, which fell by 26 per cent in the first six months of the year.

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