AUSTRALIA: CC Amatil on slide over Indonesia worries
The effects of the bombings in Bali over the weekend continue to be felt by the Australasian bottler Coca-Cola Amatil, despite assurances they will not affect the company's earnings.
Shares in CC Amatil fell today for a third straight session as the market continues to assess the implications of the terrorist attacks for its Indonesia business, which was already experiencing challenging market conditions prior to the weekend's events.
On the Australian Stock Exchange, C-C Amatil shares fell nine cents, or 1.7%, to close at A$5.25 Wednesday. The share price has lost 5.1% so far this week.
Indonesia accounts for around 11% of sales, 5% of earnings before interest and tax, and 9% of net assets at C-C Amatil, ranking it fourth in size behind the company's operations in Australia, Oceania and South Korea.
In a statement, CCA said that its Balinese business made up less than 5% of earnings before interest and tax that came from the Indonesian operations. And the company reaffirmed its 2002 full year outlook that net profit growth for the company is expected to be at the upper end of the 10%-15% target.
"This expectation reflects the current solid trading conditions in CCA's markets other than Indonesia," the company said.
CCA said that ahead of the bomb blast its previous expectation had been that " consumer confidence in Indonesia would remain low for the next six to 12 months."
"Therefore, at this time CCA hasn't changed its outlook that Indonesia's second half 2002 EBIT will be below that recorded for the first half 2002," CCA said.
However, analysts remained concerned about the knock-on effects of the bombings on consumer confidence in the region, which could lead to further reductions in growth throughout Indonesia.
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