TURKEY: Coca-Cola Icecek H1 soars despite Turkey slowdown
- H1 net profits up 111% to TRY398.7m (US$201m)
- Net sales up 42% to TRY2.49bn
- Operating profits increase 37% to TRY295m
- Group volumes jump 47%
Coca-Cola Icecek released its H1 results on Wednesday
Coca-Cola Icecek (CCI) has posted a sharp rise in first-half profits and sales helped by surging overseas performances that outpaced a Q2 slowdown in Turkey.
Net profits increased by 111% to TRY398.7m (US$201m) in the six months to the end of June, the Istanbul-headquartered group said on Wednesday (21 August). Net sales rose by 42% to TRY2.49bn over the same period, while operating profits climbed by 37% to TRY295m.
The increases were attributed to the consolidation of its Pakistan operations at the beginning of the year, which added a one-off H1 gain of TRY241.6m, CCI said.
Q2 numbers were mixed, with net profits falling by 4% to TRY133.2m and net sales up 40% to TRY1.57bn. Operating profits increased by 33% to TRY234.7m.
International volumes were up by 39% in H1 and 37% in Q2, while international net sales increased by about a third in H1 and Q2.
In CCI's domestic market, Q2 growth (volumes +3.5%; net sales +9%) was slower compared to Q1, when volumes rose by 7.5%, and sales increased by 16%. The Turkish market, which accounts for 58% of CCI's sales, also saw net profits decline, by 40% in H1 and by 50% in Q2.
The group, which is the world's sixth largest bottler of Coca-Cola, blamed bad weather in June and civil unrest for Q2's slowdown. It also said higher marketing costs that led to the decrease in profits will normalise in the second half of the year.
Damian Gammell, CCI's chief executive, said the company now expects Turkey to grow by mid- to high-single digits for the year, which is at the lower end of its guidance. International markets will grow in the high teens, he said.
Meanwhile, volumes in Iraq jumped by 234% in H1 because of the inclusion of Southern Iraq operations - which CCI bought late last year - and strong growth in the north, CCI said.
The company's share price dropped by 6% on the Istanbul stock exchange yesterday. The stock has since partially recovered.
To read CCI's official statement, click here.
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