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Soft drink bottler and producer Coca-Cola Amatil today reported a fall in net profit of 7.3% to A$194.2m for calendar 2003, hit by a significant item in the form of a A$44.6m loss following the settlement of a long running tax dispute with the Australian Taxation Office. Revenues from beverage sales were also down by 2.2%.

However, earnings before interest, tax and significant items were up 11.4% to A$470m and Coca-Cola Amatil's Managing Director, Terry Davis, said: "For the third consecutive year CCA achieved double-digit earnings growth (before significant items), with net profit increasing by 16.2%, earnings per share increasing by 15.1% and return on capital employed rising by 1.4 percentage points to 10.2%. This result reflects the continued focus on product mix improvement and maintaining discipline around capital management and cost reduction."

"CCA's priority has continued to be to materially improve the return on our capital employed. The progress made in 2003 has been significant, particularly in Australia and New Zealand with both delivering outstanding results. For the first time Australia, New Zealand and Fiji (which account for 70% of CCA's capital employed) all met and exceeded their respective cost of capital. However, significant progress is still needed to improve the returns from South Korea and Indonesia."

In 2004 CCA will said it would maintain its focus on increasing the return on capital employed through further product innovation, customer development and technology innovation. CCA also expects to further benefit from the appreciation of regional currencies on the approximate US$120m of annual US Dollar denominated cost of goods sold in Australia, New Zealand and Indonesia.

There has been some recent improvement in the operating performance in South Korea, however, the CCA said consumer confidence levels are still volatile and a material recovery in consumer confidence is not expected before the second half of 2004.

And sales volumes were down 15.4 per cent in South Korea over 2003.

"At this early stage of the year CCA remains confident that the annual earnings target (established in December 2001) of 10% to 15% net profit growth is again achievable in 2004," the company said.


Sectors: Soft drinks

Companies: Coca-Cola Amatil

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