US: Coca-Cola Bottling hit by rising costs
A weak fourth quarter, rising costs and changing consumer drinking habits have all combined to see Coca-Cola Bottling report a fall in its full year earnings.
The US-based soft drink bottler said yesterday (28 February) that it earned US$19.9m, or basic net income per share of $2.18, in 2007 compared to $23.2m, or basic net income per share of $2.55, in 2006.
In its fourth quarter, the company posted a loss of $1.8m, compared to net profit of $8.6m, in the fourth quarter of 2006.
Full year net sales were fairly flat, coming in at $1.44bn compared to $1.43bn a year earlier.
Frank Harrison, chairman and CEO, said: "In 2007 we continued to face unprecedented challenges in raw material costs, energy costs and consumer refreshment choices. To meet these challenges we focused on improving our efficiency and effectiveness especially in our supply chain management operations. While 2007 was challenging, we continue to be very encouraged about the product innovation opportunities within the still beverage category."
He added: "During 2007, we introduced smartwater, vitaminwater, FUZE, NOS energy products, V8 juice products, Gold Peak tea, Country Breeze tea, Respect and Tum-E Yummies. Innovation of new brands and packages will continue to be critical to the overall revenue of the company."
William Elmore, president and COO, added: "We continue to focus our energy on resource efficiency and improving the execution of our business operations. We were pleased to hold our operating expenses flat during a period of significant portfolio innovation despite the significant increase in raw materials, primarily aluminium packaging, sweetener and concentrate. In addition, we continued to accomplish our debt reduction goals as we were able to reduce debt, net of cash, by approximately $38m. We look forward to an exciting 2008 and the anticipated benefits from new product innovations across a number of product categories."
The company's 2007 net income included $1.7m after tax of restructuring costs. Meanwhile, net income in the fourth quarter of 2006 included the favourable impact of $4.9m, related to reduced income tax expense resulting from the settlement of tax positions with certain states.
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