AUSTRALIA: Coca-Cola Amatil warns of tough 2014 as H1 profits fall
- Half-year net profits tumble 15.6% to AUD182.3m (US$170m)
- Sales in six months to end of June inch up by 0.8% to AUD2.36bn
- Six-month operating profits decrease by 12.2% to AUD316.7m
- Business review set to close in October
- In-depth look at H1 performance available here
Coca-Cola Amatil has warned that this year's profits will be "materially below" those posted in 2013
Coca-Cola Amatil has flagged "a number of immediate challenges" as it released a poor set of half-year numbers.
The Australian multi-category drinks company saw its bottom line struggle on flat sales in the six months to the end of June. The 12.2% decrease in operating profits came in just under the 15% fall CCA warned of for the half-year back in April.
CEO Alison Watkins said today: “It is clear that the beverage landscape, particularly in Australia and New Zealand, has been evolving over the past five years with increased competition from existing players, greater penetration of value and private label products, a shift toward “better-for-you” products and the continued consolidation of the customer base in both grocery and national accounts.
"As a business we have been slow to adapt to these changes in market conditions and shifting consumer trends."
As a result of the tough trading environment, CCA launched a strategic review of its operations earlier this year.
The firm said today that it is targeting savings in the region of AUD100m over the next three years, "with the implementation of initiatives to drive around 50% of these savings already underway".
The company expects to complete its review by the end of October.
Looking to the full year, Amatil said: “While it’s too early for full-year guidance, we expect earnings for 2014 to be materially below 2013."
Amatil's share price suffered following the release of the results, closing 2.05% down today at AUD9.54.
For a deeper look at Coca-Cola Amatil's results, click here.
To read the company's official statement, click here.
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