• H1 net profits up 1% to AUD187.3m (US$137.7m)
  • Net sales up 5% to AUD2.5bn
  • Operating profits (EBITDA) up 1% to AUD453.9m
  • Australia soft drinks EBIT down 6%
CCA is undergoing a cost-cutting programme

CCA is undergoing a cost-cutting programme

Coca-Cola Amatil (CCA) has steadied the ship with first-half sales and profits growth as it pumped marketing investment into the struggling Australian market.

The company, which saw full-year profits slump by 25% in February, increased net profits by 1% to AUD187.3m (US$137.7m) in the first six months of the year. Net sales were up by 5% to AUD2.5bn after a 2% fall in FY, and operating profits (EBITDA) increased by 1% to AUD453.9m.

CCA managing director Alison Watkins, who has spearheaded a cost-cutting programme since her appointment in March 2014, said the results were in line with expectations and that “concrete progress” had been achieved.

In Australia, which has seen the soft drinks market contract in the past few years, Watkins highlighted stronger headwinds than expected but said sales and volumes increased and CSD volumes stabilised. The increases were driven by more investment in pricing, brand building, innovation and route to market, which pushed down EBIT for the country by 6% compared to last year.

CCA's alcohol & coffee category grew EBIT by 30% on the back of improved market share and new products for Beam Suntory. CCA in June signed a new ten-year distribution deal for Beam Suntory's portfolio in Australia and last week expanded the agreement to include New Zealand.

CCA's share price spiked on the release of its results today. At close of trading it was up by 2.7% to AUD8.78.

To read the company's full results, click here.