US: CCE full-year profits take a battering
Coca-Cola Enterprises has posted a plunge in full-year profit. The Coke marketer and distributor today (9 February) reported a 14% fall in profits for last year, as restructuring costs, tax expenses to repatriate foreign earnings and asset write-offs for hurricane damage took their toll.
Net income for the year came in at US$514m compared to US$596m in 2004. Sales for the year were up slightly to US$18.7bn from US$18.2bn.
"While we are not satisfied with our overall 2005 results, we are encouraged by the balanced volume and pricing growth in North America," said Lowry F. Kline, chairman of the board and CEO.
"These results demonstrate substantial progress in improving our North American business model to drive consistent operating results. We will combine this progress in 2006 with an outstanding calendar of brand extensions and new products and the full year benefit of our new North American operating framework.
"Our success in controlling the growth of our 2005 operating expenses also strengthens our confidence about our future performance," Kline added.
"Our cost control efforts, which limited comparable 2005 operating expense growth to only 1%, gave us needed flexibility in dealing with the challenging operating dynamics of last year.
"Though our work to generate pricing growth and achieve operating expense savings was also effective in Europe, our overall performance there remains below our targets as we work to overcome consumer and market trends impacting our business, including weak retail trends in some markets, health and wellness concerns and the continued growth of deep discount retailers."
For the final quarter of last year, the company saw its net loss come in at US$57m on sales of US$4.5bn in revenue, compared with net income of US$82m on US$4.4bn in revenue in the corresponding period a year earlier. A tax charge of US$128m following repatriation of earnings took effect in the final quarter.
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