AUS: Coca-Cola Amatil posts profits plunge after AUD404m write-down
- FY net profits down 83% to AUS79.9m (US$72m)
- Net sales in 2013 down 1% to AUD5.08bn
- Operating profits (EBIT) down 52% to AUD367.9m
- SPC Ardmona announces AUD404m write-down
CCA lost ground in Australia's grocery channel
Coca-Cola Amatil has reported a sharp drop in full-year profits because of a major write-down in its canned fruit and vegetable business, but weakness in Australia also meant a disappointing 2013 for beverages.
Net profits in the 12 months of 2013 were down by 83% to AUS79.9m (US$72m), the Sydney-based group said earlier today (18 February). Net sales dipped 1% to AUD5.08bn in the same period, while operating profits (EBIT) were down 52% to AUD367.9m.
Amatil's fruit and vegetable cannery, SPC Ardmona, announced a AUD404m write-down that lowers the unit's value to about AUD300m. It follows a AUS146m write-down in FY2012 results.
Beverages suffered too, with “difficult trading conditions” in the Australian grocery channel leading to a 9.3% drop in Australian beverage profits, CCA said.
There was a slight slowdown in Indonesia but the country still delivered 10% volumes growth. However, CCA warned of a “significant slowdown” in Papua New Guinea over the year, and said inflationary pressures in Indonesia had impacted the second half.
CCA said its Beam Inc spirits portfolio “delivered solid earnings growth”.
CCA chief executive Terry Davis said: “The difficult trading conditions for the Australian beverage business in the grocery channel, combined with the impact on SPC Ardmona earnings from imported private label products, and the significant slowdown in the PNG economy, led to a reduction in earnings for 2013 of 6.9%. The positives for the year included the Australian beverage non-grocery channel, which delivered volume and earnings growth, the strong return to growth by New Zealand and Fiji, and CCA’s re-entry into the Australian beer and cider market in mid-December.”
Looking ahead, the company announced a review of its Australian beverage business that will aim to lower distribution and production costs. It also said it expects double-digit volume growth in Indonesia to continue.
CCA's share price on the Australian Stock Exchange was down 5.3% at the end of trading today.
To read the company's official results statement, click here.
Click here for a more in-depth look at CCA's performance in the year.
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