AUS: Coca-Cola Amatil H1 profits slide on charge
- H1 net profits drop by 28% to AUD153.6m (US$154m)
- Net sales rise by 5.3% to AUD2.25bn
- Operating profits (EBIT) increase by 3.3% to AUD386.1m
- Profits hit by write-down charge on SPC Ardmona business
Coca-Cola Amatil suffers H1 profits fall
Coca-Cola Amatil has seen its half-year profits damaged by an impairment charge on its fruit and vegetable business, but net sales increased thanks to alcoholic and soft drinks in Australia.
The Australia-based drinks group reported AUD112m (US$112.3m) in write-down charges on its SPC Ardmona fruit and vegetable business, which dragged company-wide net profits down by 28% for the six months to the end of June, to AUD153.6m.
Excluding these charges, net profits would have risen by 5.4%, with earnings before interest and tax (EBIT) up by 3.3% to AUD386.1m. "I believe that the operating performance in the first half has been solid," said Coca-Cola Amatil's MD, Terry Davis.
He said that the group was forced to content with rapid rises in resin costs in the first-half, flooding in Australia and a stronger Australian dollar, the latter of which wiped 5% off group net profits for the six months. In its outlook, the firm said that it expects profits momentum to improve in the second-half.
At the top-line, Coca-Cola Amatil (CCA) reported a mixed performance. Higher prices and cost savings helped to offset lower soft drinks volumes in Australia, the group's largest market, and also a drop in consumer demand in neighbouring New Zealand.
CCA's alcoholic drinks business received a boost from its new 10-year distribution deal with Beam Global Spirits & Wine, soon to be renamed Beam Inc. The distribution deal, announced in March, followed a reworking of CCA's joint-venture with SABMiller, Pacific Beverages, in order for the Peroni Nastro Azzurro brewer to bid for Foster's Group.
Regarding SPC Ardmona, CCA said today that it will restructure the business by closing one of its three manufacturing facilities - the Mooroopna plant. For more on this, click here.
To view the company's results announcement, click here.
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