GREECE: Coca-Cola HBC H1 profits fall as key markets drag
- H1 net profits decrease 27% to EUR65.5m (US$87.4m)
- Sales down by 1.1% to EUR3.38bn
- Operating profits fall by 18.5% to EUR134m
- Volumes down 1% to 1bn unit cases
Coca-Cola Hellenic is facing tough conditions at home
Coca-Cola HBC has posted a drop in first-half profits as rising unemployment in established regions offset emerging market gains.
Net profits fell by 27% to EUR65.5m in the six months to 29 June, the Athens-based bottler said today (8 August). Net sales fell by 1.1% to EUR3.38bn over the same period while operating profits dropped by 18.5% to EUR134m.
Volumes stayed mainly flat, down 1% to 1bn unit cases.
Second-quarter results were similar, with net profits down by 24% to EUR89.9m and net sales were flat at EUR1.95bn. Operating profits were down by 17.8% at EUR145.3m while volumes were down by 2% to 578m unit cases.
CCHBC's “established” markets, including core regions Greece, Italy and Austria, saw volumes drop by 6% and sales by 7% in the first half. Operating profits, meanwhile, plummeted by 48%, and by 46% in the second quarter.
“Emerging” markets, including Nigeria, Russia, Romania and Ukraine, posted a 4% and 5% gain in H1 volumes and sales respectively. However, operating profits were only marginally higher, up 1% for the half.
CCHBC's chief executive, Dimitris Lois, said: “Our emerging markets were the drivers in terms of volume growth, albeit at a slower pace. The volume decline in our established and developing markets reflects the ongoing difficult macroeconomic environment in most of our European markets.”
CCHBC has been under pressure for some time because of ongoing weak demand in its domestic market, and other key markets such as Italy. Analysts described Q1 as “mixed” because of core market weakness but gains in Russia and Nigeria, while in FY results in February net profits tumbled by 28% despite a slight gain in sales.
The company, which is the Coca-Cola Co's second largest bottler, this year moved its primary listing from the stock exchange in its native Athens to London to give it better access to new funds. Lois today described the switch as a “key milestone” in CCH's history. The change means the company now calls itself Coca-Cola HBC instead of Coca-Cola Hellenic.
Looking ahead, CCHBC said “challenging” trading conditions will continue across most of its territories for the year, while “economic uncertainty and austerity measures are expected to continue to lead to lower disposable income and high unemployment across the Eurozone”.
CCHBC's shares were up by 3.6% in morning trading.
To read the company's official statement, click here.
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