AUS: Coca-Cola Amatil mulls Korea exit
Coca-Cola Amatil (CCA) may sell its South Korean bottling business after its operations there hit earnings during 2006.
The Australia-based Coca-Cola Co. bottler saw operating profit fall 5.5% to A$539.4m (US$423.5m) last year. Earnings were hit by a product recall in South Korea as well as high sugar, plastic and aluminium costs across the business.
Surprisingly, earnings in South Korea rose last year, although the figures were boosted by a number of asset sales, CCA said.
The company is undertaking a review of its business, which stretches across six countries in Asia-Pacific, and admitted a sale of its South Korean operations could be on the cards.
CCA said it has enlisted banking giant Goldman Sachs JBWere to help in the "assessment of the best ownership options for the South Korean business, which may or may not result in the divesture of some or all of CCA's South Korean operations".
Company revenues, however, rose 6.7% to A$4.4bn, driven by rising sales in Australia, where the company enjoyed a successful launch for Coca-Cola Zero.
"Coca-Cola Zero has been the biggest beverage launch for CCA in 22 years and an exceptional opportunity for the business to develop a major new segment, said managing director Terry Davis yesterday (15 February).
Earnings in Australia rose 2% last year and were flat in New Zealand after an improved second half of the year, CCA said.
Profits in Indonesia slumped 58% but CCA said the business had recovered somewhat in the second half, when earnings rose to A$29m from a A$12m loss in the first six months of the year
"We see Indonesia in a totally different light than we're seeing Korea," Davis told local reporters.
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