Coca-Cola hurt by less fizzy drink demand

PETRINA BERRY
August 26, 2016
Australian Associated Press
Less demand for fizzy drinks in Australia continues to challenge Coca-Cola Amatil as it rebalances its business towards water, energy and dairy drinks.
The beverages giant, which operates in six countries, posted a half-year profit of $198.2 million, up 7.8 per cent from the corresponding period a year ago.
Its Australian business showed weakness with earnings before interest and tax down 1.9 per cent to $218 million in the six months to July 1.
Managing director Alison Watkins said the group continued to shift its Australian business towards water, energy and dairy drinks amid falling consumer demand for soft drinks.
She said volumes of still beverages increased by 9.3 per cent in Australia, driven by strong performances from water, energy and dairy drinks.
“This was the result of innovation and investment across the categories that commenced in 2015, including the introduction of FUZE Tea and Monster Energy,” she said.
She said the new Mount Franklin marketing campaign was also boosting sales.
Overall group revenue rose 2.8 per cent to $2.5 billion with alcohol and coffee delivering double-digit revenue and EBIT growth.
Indonesia, Papua New Guinea, Fiji, the group’s growth markets, also performed strongly.
Ms Watkins said it was a solid overall group performance and the company was on track to hit its mid-single digit profit growth target.
Shares in Coca-Cola were down 42 cents, or 4.38 per cent, to $9.17 at 1208 AEST.
COCA-COLA HALF-YEAR RESULTS:
* Half-year profit up 7.8pct to $198.2m
* Trading revenue up 2.8pct to $2.5b
* Interim dividend of 21 cents a share, up from 20 cents.