US: China, Brazil buoy Coke H1 results

Coca-Cola Co. yesterday (18 July) posted a set of steady first-half results on the back of rising sales in key emerging markets including China and Brazil.

The world's largest drinks company reported a 3% rise in first-half operating income to US$3.4bn on the back of a 2% increase in net revenues to US$11.7m.

Operating profit for the second quarter ending 30 June was up 3% to US$2.03bn with revenues also up 3% to US$6.5bn, Coke said.

The company's most notable performances were in China, where second-quarter volumes leapt 14%, driven by "double-digit" growth from Coke's core carbonated soft drinks stable. Meanwhile, in Brazil, Coke saw second-quarter volumes rise 7%, despite lapping last year's second quarter when volumes leapt 17%.

In Latin America as a whole, operating income leapt 21% due to rising revenues in Brazil, Argentina and Mexico.

Worldwide first-half volumes were up 4%, Coke said, with its Powerade and Dasani brands driving sales growth. Coke also enjoyed growth from its core CSD stable, with its flagship Coca-Cola brand growing volumes by 3% during the second quarter.

However, Coke's performance on a geographical basis remained mixed. The company enjoyed revenue and profit growth in North America but saw first-half revenues slump 16% in the EU largely due to restructuring costs in Spain. Coke insisted that volumes in north-west Europe had "stabilised" as the company saw some improvement in the UK.

Second-quarter volumes in Japan fell 6%, slumped by 12% in India and fell in the "high teens" in the Philippines, where Coke is in talks to buy out local bottling partner San Miguel Corp.

Coke chairman and CEO Neville Isdell said: "Our results clearly demonstrate that the majority of our markets are performing well and more than offsetting the challenges we have in a few markets."