GREECE: Gloom worsens for Coca-Cola Hellenic as FY profits plunge

• Full-year net profits tumble by 28% to EUR190.4m (US$256.3m)
• Net sales in 2012 inch up by 3% to EUR7.04bn
• Operating profits also plunge, by 25% to EUR337.7m
• Volumes stay flat as established markets drag

Coca-Cola Hellenic (CCH) will be glad to see the back of 2012 after posting profits in freefall for the year.

The Greece-based Coca-Cola bottler said earlier today (14 February) that net profits last year were down by 28% on 2011, coming in at EUR190.4m (US$256.3m). While net sales rose by 3% to EUR7.04bn, operating profits also fell markedly, by 25% to EUR337.7m.

For the last three months of the year, CCH reported a net loss of EUR45.8m, compared to a loss of EUR11.6m in Q4 2011. Sales in the period rose by 5% to EUR1.60bn. Operating profits of EUR24.2m a year earlier were reversed in the last quarter of 2012, becoming an operating loss of EUR28.4m.

While the company's emerging markets delivered volume growth of 4% in 2012, group volumes were dragged down by CCH's established markets, which include Greece. Volumes from these markets fell by 5% in 2012.

"Unfavourable foreign currency fluctuations and higher operating expenses" were blamed for the FY profits fall.

"We anticipate that in 2013, disposable income will remain under pressure, resulting from continued austerity measures and high unemployment, particularly in our established markets," warned company CEO Dimitris Lois.

While this year appears equally troublesome for CCH, which highlighted ongoing austerity measures in its established markets, the company said it will "continue to pursue further opportunities to sustainably improve operational efficiencies.

"In this respect, we have identified additional restructuring initiatives. We expect to incur costs of approximately EUR50m from restructuring initiatives in 2013 that are expected to yield EUR30m in annualised benefits from 2014 onwards."