Coca-Cola Amatil said it delivered a profit of $189.8m in the first half, while EBIT increased 10% to a record $339.8m. In other results, revenue increased 7.6% to $2.1bn, while earnings per share rose 10.3% to 25.7c. The beverage maker also increased its interim dividend from 17c to 18.5c per share.
Group MD, Terry Davis, said it was a positive result despite the difficult trading conditions: “Excellent performances from the Australian and Indonesian & PNG beverage businesses, as well as a much improved result from the Food & Services division, continues to reinforce the success of CCA’s organic growth strategy.
“The New Zealand & Fiji business delivered modest growth in local currency earnings in very challenging economic conditions.”
The company said the highlight of the report was the performance of the Australian Beverage business, which delivered strong revenue and earnings growth.
“Demand for higher value single-serve products benefited from the favourable summer weather in the first quarter,” Davis said.
Strong price discipline and mix management, combined with efficiency gains and cost savings generated from CCA’s infrastructure development program as well as the increase in earnings from the manufacture and distribution of alcoholic beverages all contributed to the excellent result for the Australian beverage business.”
Looking at the regional performances, Indonesia and PNG was a standout after delivering a record first half result with EBIT growth of 44.2% to $15m on strong volume growth of 10.8%.
Coca-Cola Amatil achieved a record first half result with EBIT growth of 10.1%, while in New Zealand and Fiji the company reported an EBIT decline of 3.9% due the translation of local currency earnings into Australian dollars.
Food & Services’ EBIT grew 20.6% as SPC Ardmona delivered solid revenue growth in all major categories and the completion of the restructure of SPCA’s Australian manufacturing operations in the Goulburn Valley contributed approximately $3m.
The company attributed the 12.2% increase in beverage cost of goods sold (COGS) to higher sugar costs, the devaluation since the prior period of relevant currencies against the US dollar and the mix impact of higher cost, higher value product. COGS was also influenced by significant commodity cost increases in Indonesia.
CCA’s return on average capital employed increased from 22.4% to a record 23.3%, primarily due to the double-digit earnings growth.
The company also delivered a strong operating cash flow result for the half of $254.7m, an increase of $69.2m or 37.3% over the previous corresponding period.
Looking ahead, Mr Davis said the company expects organic growth to come through the implementation of a strong pipeline of revenue generating and cost saving capital projects.
“The increase in production capacity, accelerated placement of cold drink coolers and ongoing new product development will all contribute to this growth and will also further strengthen our leadership position in each of our markets,” Mr Davis said.
Coca-Cola said lower mortgage interest rates and petrol prices, combined with the July income tax cuts, are all having a positive effect on consumer demand and spending, however a higher unemployment rate may impact performance in the second half.
Source: Egoli
© FoodBev Media Ltd 2024