Italian fashion giant Benetton Group SpA on Monday posted a 29 per cent year-on-year jump in first quarter net profit to 25 million euros ($29m) driven by the sale of its loss-making sports units and improved cost-cutting.

The company said consolidated sales slipped to 444 million euros from 447 million euros with sales at its apparel division up almost four per cent to 351 million euros - excluding changes in exchange rates.

Group operating income fell 4.2 per cent to 192 million euros while operating income from the clothing unit rose four per cent to 52 million euros. The firm said its debt fell to 709 million euros from 756 million euros at the end of March 2002.

Chairman Luciano Benetton said the group is in line to meet its 2003 outlook and would maintain a policy of paying out about half of its net profit in dividends this year.

He added: "The Benetton Group decided to make a break with the past in 2002 by ending its experience in the sports equipment business, whose results over the years had failed to provide the same level of satisfaction as the fashion sector.

"With regard to the core business of clothing, our system confirms its ability to be competitive and generate value: although net income for 2002 was affected by extraordinary items deriving mostly from the sale of the sports sector, this did not harm shareholders' returns.

"It is superfluous to dwell on the international crisis and the gloomy outlook for markets and consumption. I have always said that it is during times of greatest difficulty that those who are most prepared are able to grasp the best opportunities."