CCA is hit after spending fizzles out

Glenda Kwek
February 19, 2013
The Age

Coca-Cola Amatil has reported a net profit of $459.9 million for the 2012 financial year – a 22.3 per cent drop from the year before – as it deals with weak consumer spending and the high Australian dollar.

The beverages supplier recorded total trading revenue of $5.1 billion for 2012, an increase of 6.2 per cent from the year before.

The net profit before significant items of $558.4 million was up five per cent from $532 million in the prior corresponding period, in line with the company’s previous forecasts.

“Given the difficult trading conditions experienced throughout the year, [Coca-Cola Amatil] has delivered another excellent result with 5.0 per cent growth in net profit [before significant items] to $558.4 million,” managing director Terry Davis said.

“The stand-out performer was once again Indonesia & PNG with double-digit volume and earnings growth while Australia delivered solid volume and earnings growth and increased market share despite a difficult trading environment,” he said.

The result included $98.5 million in writedowns, related to its SPC Ardmona business, which has struggled to compete against supermarket labels and imports due to the high Australian dollar.

Mr Davis said volume and earnings in the company’s Australian business was solid given a difficult trading environment.

“Earnings growth was moderated by disappointing performances from New Zealand and SPC Ardmona, with the ongoing impact of the high Australian dollar on the competitiveness of SPC Ardmona leading to a writedown of assets and goodwill in the business,” he said.

The compnay declared a final ordinary dividend of 32 cents per share, which will be 75 per cent franked. It also declared a special unfranked dividend of 3.5 cents per share taking total dividends for 2012 to 59.5 cents.

Earnings in Australia rose 3.3 per cent from the corresponding period to $627.4 million, while earnings in New Zealand and Fiji dropped 12 per cent to $70.1 million.
The company’s operations in Indonesia and Papua New Guinea posted earnings growth of 17 per cent on the previous corresponding period, to $103 million.

Significant investments had been made in those countries in anticipation of a new product and package pipeline in 2012, CCA said.

Mr Davis said Australian revenue and earnings were expected to grow in 2013.

‘‘We do, however, remain concerned by the generally weak consumer spending environment which has persisted for the last two years,’’ he said.

Momentum in PNG and Indonesia would continue in 2013, with revenue there expected to exceed $1 billion for the first time.

The company’s expenditure is forecast to reduce from peak levels in 2012, to an average of $350 million to $420 million each year over the next three years.
With AAP

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