US: Coca-Cola Bottling Co. profits hammered in “difficult year”
Coca-Cola Bottling Co Consolidated has seen its full-year profits take a pummelling in 2008, dropping by over a half.
The US-based company said yesterday (5 March) that, while sales in the 12 months to the end of December inched up to US$1.46bn from $1.43bn in 2007, net profits for the period reached $9.1m. A year earlier, net profits came in at $19.9m.
Operating profit for the year totalled $59.5m, down from $81.9m in 2007.
Coca-Cola Bottling Co. Consolidated (CCBC) blamed the fall in net profits on two charges - one for freezing its liability to a pension fund, the other for a restructuring plan. The former cost CCBC $7.3m after tax, with the restructuring costs hitting the bottom line to the tune of 2.4m, again after tax.
In the final quarter of 2008, sales rose slightly on the corresponding period a year earlier, hitting $348.4m, against $340.6m. Net profits reached $1.4m, compared to a net loss of $1.8m in the fourth quarter of 2007.
Operating profit performed well in the quarter, totalling $13.2m versus $8.6m a year earlier.
"In 2008, we continued to face very difficult macroeconomic circumstances and business challenges specific to the soft drink industry," said company chairman and CEO, Frank Harrison. "We streamlined our business and reviewed all capital and operating expenditures allowing us, thus far, to not only weather the severe economic downturn, but also produce a much improved fourth quarter."
William Elmore, president and COO, added: "We saw fuel prices and other key commodity inputs including corn, aluminum and PET resin increase rapidly to record levels in the summer of 2008 before subsiding in the late fall. The dramatic increases in commodity costs, coupled with the challenges of driving consumer demand for sparkling beverages, made 2008 a very difficult year.
"Even though we see continued challenges in 2009 and the possibility of more difficult decisions in response, we are encouraged by the momentum we have built over the last three quarters of 2008 and carry into the new year. Most importantly we remain confident about the long-term prospects for our business."
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