US: Coca-Cola Enterprises toasts 2007 for loss reverse

Coca-Cola Enterprises has bounced back from 2006's net loss to post profit for last year.

The marketer, distributor and producer of Coca-Cola Co. products said today (12 February) that the net loss of US$1.14bn in 2006 was turned around in 2007, hitting a profit for the year of $711m. Total sales for the year also rose, by 5.5% to $20.94bn, despite a 2% slip in sales volumes in North America.

Operating profit also reversed the loss in 2006 at $1.49bn, moving into the black to the tune of $1.47bn.

A year ago, the net loss of US$1.1bn for 2006 was blamed on the absorption of a US$2.9bn impairment charge. CCE said at the time that the charge was taken to reduce the book value of its North American franchise license intangibles to their estimated fair value.

"Our 2007 results reflect success in becoming more effective and efficient, in providing customers with improving levels of execution, and in developing our brand portfolio," said company president and CEO, John Brock. "We are encouraged by our 2007 performance, which leaves us well-positioned to begin achieving our long-term objectives."

While North American volumes fell by 2% in the year, volumes in Europe were up by 1.5%. "We are encouraged by recent European volume trends," Brock said. "This growth demonstrates Europe's potential for continued growth in 2008 and beyond.

Looking ahead to 2008, CCE said that sales are expected to rise in the high single-digit range, thanks to the impact of the first full-year's distribution for the Glacéau, Fuze and Campbell brands. Operating income is expected to increase at the high end of the long-term target range of 5% to 6%.

While increasing the annual dividend payment to shareholders by 17% to $0.28 per share, CCE also said that it will resumed its existing stock buy-back programme this year. Additional details of the programme are set to be unveiled by the end of the next quarter, CCE concluded.

The dividend will be paid on 27 March to shareholders of record on 14 March.