AUS: Coca-Cola Amatil FY profits drop despite beverage gains

By | 19 February 2013

  • FY net profits slide by 22% to AUS459.9m (US$475.7m)
  • Net sales up by 6.3% to AUS5.18bn
  • FY operating profits (EBIT) down by 12.6% to AUS761m
  • Writedowns on packaged food business hit profits 
CCAs fruit-and-vegetable business dragged profits growth

CCA's fruit-and-vegetable business dragged profits growth

Coca-Cola Amatil (CCA) has posted a sharp drop in full-year net profits as write-downs in its packaged food business offset beverage gains in Australia, Indonesia and Papua New Guinea.

Net profits fell by 22% to AUS459.9m (US$475.7m) in the 12 months to the end of December, the Sydney-based company said today (19 February). Net sales rose by 6.3% to AUS5.18bn over the same period while operating profits fell by 12.6% to AUS761m.

The company did not release fourth-quarter figures.

CCA blamed foreign currency fluctuations, the deflation of fresh fruit prices and competition from imported labels for problems with its packaged fruit and vegetables business SPC Ardmona (SPCA) unit, which took a hit of up to AUS146m in write-downs and costs.

New Zealand & Fiji also dragged profits growth, with the region's operating profit down by 11.8% year-on-year.

CCA group MD Terry Davis acknowledged SPCA and New Zealand's “disappointing performances” but said that, minus significant items such as the SPCA write down, net profits were up by 5%.

Davis also said “the standout performer was once again Indonesia & Papua New Guinea” as the region posted double-digit volume and earnings growth. Australia also delivered strong volumes growth (3.3%), sales growth (5.1%) and increased market share, Davis said.

In December, CCA predicted a 4-5% rise in group net profits for the full year. 

It is not the first time CCA has suffered from poor performance by SPCA, which sells packaged fruit and vegetables. In 2011 H1 results, profits were damaged by an impairment charge on the business.

Looking ahead, Davis said that “material progress has been made” over plans to re-enter the Australian beer market this year. He also said the company has started a costs-savings programme that is expected to recoup about AUS30-40m in efficiency gains.

CCA is expected to re-enter the Australian beer market in early-2014, once the terms of the sale of its previous beer business to SABMiller has expired.

Momentum in Indonesia and Papua New Guinea is expected to continue. Davis said: “The outlook for growth continues to be positive with revenue expected to exceed AUS1bn for the first time in 2013."

CCA's share price rose slightly after today's results, up by 2% at close of trading.

To read the company's official statement, click here.

Expert analysis

Coca-Cola Amatil Limited (CCL) - Financial and Strategic SWOT Analysis Review

Coca-Cola Amatil Limited (CCA) is a food and beverages company. The company manufactures, distributes and markets carbonated and non-carbonated beverages. The key products of the company consists of carbonated soft drinks, still and mineral waters, sports drinks, iced teas, fruit juices, flavored milk, packaged ready-to-eat fruit and vegetable products and alcoholic beverages.. It also produces and markets bottled water brand Mount Franklin and sports beverage brand PowerAde Isotonic. CCA undertakes sales and distribution of premium spirits with the help of partnership with Beam Global Wines and Spirits. CCA operates across five countries, namely, Australia, Indonesia, Fiji, New Zealand and Papua New Guinea. The company is headquartered in Sydney, New South Wales Australia. The company's strategic intent focuses on increasing its portfolio through mergers and acquisition of other companies. In line with this strategy the company announced acquisition of Foster’s Fiji Business for a purchase price of approximately A$58 million

Sectors: Beer & cider, Company results, Soft drinks, Spirits

Companies: Amatil, SABMiller

View next/previous articles

Currently reading -

AUS: Coca-Cola Amatil FY profits drop despite beverage gains

There are currently no comments on this article

Be the first to comment on this article

Related research

Coca-Cola Amatil Limited - Mergers & Acquisitions (M&A), Partnerships & Alliances and Investment Report

MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organization to sustain its competitive advantage....

Coca-Cola Amatil Limited : Consumer Packaged Goods - Company Profile, SWOT & Financial Report

Canadean's "Coca-Cola Amatil Limited : Consumer Packaged Goods - Company Profile, SWOT & Financial Report" contains in depth information and data about the company and its operations. The profile contains a company overview, key facts, major products...

Guatemala Beer Market Insights 2013

This report comprises high level market research data on the Guatemala beer industry, published by Canadean. The report covers the total market (on- and off-premise) and includes valuable insight and analysis on beer market trends, brands, brewers,...

Related articles

AUS: 'Cash for cans' recycling scheme return sparks anger

A trade body has hit out at a move by Australia's Northern Territory Government to reinstate a controversial recycling scheme.

AUS: Coca-Cola Amatil exec moves to head Diageo sales team

A Coca-Cola Amatil (CCA) executive is leaving to head Diageo Australia's commercial team after 12 years in the Coca-Cola Co system.

just-drinks tagline

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page