AUS: CCA profits up despite consumer caution
Asia-Pacific drinks group Coca-Cola Amatil saw sales of its core brands drive full-year earnings during 2005.
Coca-Cola Amatil, which produces, bottles and distributes Coke products across Australasia, Indonesia and South Korea, posted a 15% rise in net profit to A$320.5m (US$236.9m). Revenues rose 17.4% to AS$4.2bn.
"Coca-Cola has delivered a strong result for the business against the backdrop of higher cost of goods sold, softer economic conditions and a more competitive marketplace," chief executive Terry Davis said today (9 February).
Davis said the company's performance in Indonesia was "the standout result of the year".
"The business benefits from improved in-market execution, which is helping to drive CCA's products," he added.
Product innovation and expansion into non-carbonated drinks helped drive sales in Australia, despite a "softening" in demand due to lower consumer spending. Weak consumer confidence in New Zealand also weighed on sales, although revenues were up 2.5%, Coca-Cola Amatil said.
Australia generates around half of revenues Coca-Cola Amatil's revenues and the company hopes the recent launch of sugar-free drink, Coke Zero, will boost profits.
The company launched Coke Zero on a test basis last month and Davis said the response so far from consumers had "exceeded expectations". The launch of Coke Zero had provided a boost to the company's core brands including Coke and Diet Coke.
"We're quietly confident the excellent response will continue," Davis added.
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