US/CANADA: Troubles continue in Q2 for Cott Corp.
Cott Corporation has posted a slide in sales and a net loss for its latest quarter.
The Canada-based soft drinks company said today (31 July) that sales in the three months to the end of June slipped by 6.4% year-on-year to US$466.5m, due to lower volumes in North America. Cott also reported a net loss of $1.8m compared to a profit of $4.7m in the corresponding period a year earlier. Operating profit fell to $5.3m from $6.2m.
The quarter included $7.1m of restructuring and asset impairment charges, compared to $9.1m in the second quarter of 2007. Stripping out these charges, Cott said it would have generated operating profit of $12.4m for the current quarter compared to operating profit of $15.3m in the comparable prior year quarter.
In North America, net selling prices per beverage case were up 1.3% compared to the second quarter of 2007. The International business unit generated revenue growth of 3.4%. On a beverage case volume basis, International volumes declined 2.9% while total case volumes declined 14.8%. UK and Europe beverage case volume decreased 1.6% and revenues increased 6.0% due to higher selling prices and improved product mix. In Mexico, softness in the modern trade and the impact of Cott's new credit policies resulted in a beverage case volume decline of 9.8% compared to the prior year, and a revenue decrease of 5.8%.
Last month, Cott said it will refocus its North American unit on its core private label business. "We are receiving positive feedback from our retail customers following our June announcement," said Cott's interim CEO, David Gibbons. "After a difficult April, I was encouraged by our results in North America over the balance of the quarter. Consumers are feeling the impact of higher prices on food and fuel; these developments traditionally favour private label products like Cott's."
For the first six months of this year, sales fell to $856.2m from $898.7m, with net losses soaring to $23.1m from a net profit of $9.5m a year ago. Operating losses hit $6.9m compared to an operating profit of $21.8m.
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