Focus - Coca-Cola Amatil's H1 Performance by Region, Sector
Coca-Cola Amatil released it half-year results today
Earlier today, Coca-Cola Amatil reported its half-year results for 2014, revealing a 15.6% fall in net profits on flat sales. Here, just-drinks takes a closer look at the Sydney-based company's performance in the six-month period by region and sector.
- Sales down by 0.5%, volumes up by 0.4%. EBIT down by 14.1%
Amatil flagged difficult trading conditions in its Australian business, resulting in a 14.1% fall in profits from its operations in the country.
The company expects its Australian presence to continue to be "challenged" in the second half of 2014 due, in part, to "a continuation of difficult pricing conditions".
The country is the primary target of Amatil's strategic review, which was announced in April.
New Zealand and Fiji
- Sales up by 12.5%, volumes down by 2.1%. EBIT up by 12.0%
In local-currency terms, profits from New Zealand and Fiji came in flat. The year started with poor weather in NZ, resulting in volume declines across the non-alcoholic ready-to-drink segment. However, Q2 saw growth return in the country. Double-digit volume growth was posted by the juice, water and energy categories, as Amatil delivered share gains.
The Fiji business delivered “solid” volumes and profits growth driven by steady economic growth conditions.
Indonesia and Papua New Guinea
- Sales flat, volumes jump by 22.2%. EBIT down by 83.4%
Despite "strong" volume growth and market share gains in key categories in Indonesia, rapid cost inflation, currency depreciation and increased competition impacted Amatil's segment profits.
"After six years of strong revenue and earnings growth (in Indonesia), we are experiencing substantial cost inflation at a time of intensified competitor activity with a larger number of players vying for a position in the fast-growing beverage market," the company said. That said, Amatil flagged a strong Ramadhan trading period in the country.
Papua New Guinea reported a rise in profits as economic conditions improved. The company toasted a “revised pack strategy” that was initiated in the second half of last year.
- Sales down by 1.7%, EBIT up by 4.5%
A "modest" dip in profits from its alcohol category operations was blamed on a "decline in the dark spirits category on Beam earnings".
The firm also saw a higher-than-expected marketing spend during the launch phase of its new beer and cider portfolio.
Amatil said: "We must acknowledge the rapid pace of change in the alcoholic beverage categories in which we compete and we expect this will lead us to establish an updated set of annual targets and timeframes for returns reflecting our revised growth plan."
Profits in the full year are forecast to decline, "driven by an expectation of continued weakness in the dark spirits category".
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