Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn


Coca-Cola Amatil posts 7.8pc rise in 1H profit

Nicholas Grove  |  26 Aug 2016Text size  Decrease  Increase  |  

Page 1 of 1

The Coke bottler records a 7.8 per cent lift in half-year earnings after a strong performance in its growth markets counteracts changing Australian consumer tastes.


Coca-Cola Amatil's (ASX: CCL) net profit for the six months ended 30 June 2016 rose 7.8 per cent on the same period in the prior year to $198.2 million, after a strong performance in the company's growth markets offset a decline in the Australian beverages business.

Earnings per share (EPS) also rose 7.8 per cent on the same period in the prior year to 26 cents a share, the Coke bottler said in a statement to the ASX on Friday.

The EPS result was towards the company's target of "sustainable mid-single-digit EPS growth in the medium term".

Net operating cash flows increased from $161.2 million as of 3 July 2015 to $331.7 million, with cash realisation of 98.1 per cent.

Coke Amatil declared a half-year dividend of 21 cents a share, franked to 75 per cent, which represents an increase of 5 per cent and results in a payout ratio of 80.8 per cent for the first half.

Group earnings before interest and tax (EBIT) rose 3.2 per cent year over year to $326.9 million, the company said.

The company's businesses in Indonesia and Papua New Guinea recorded EBIT growth of 65.2 per cent, the Alcohol & Coffee segment grew earnings by 33.6 per cent, while New Zealand and Fijian operations saw EBIT rise 5.4 per cent.

In contrast, the Australian beverages business recorded a 1.9 per cent fall in EBIT as the division continues to focus on "rebalancing the portfolio to reflect consumer demands and trends".

Overall, managing director Alison Watkins described the company's performance as "solid," and said the Australian business is moving to meet consumer demands with a greater focus on portion size and product reformulations.

"We are also continuing with a strong cost-management program, improved route-to-market performance and a reinvestment of cost savings into price and brand," she said.

While not providing any earnings guidance, Watkins said the Coke Amatil's 2014 strategic review continues to set the direction for the company.

"We know that conditions, particularly in Australia, will continue to be challenging and that our task will be to continue the performance of our growth businesses in the second half, demonstrating that our growth is real and sustainable," she said.

"We know that our markets will continue to challenge us. However, the plans we put in place two years ago are starting to deliver the outcomes we anticipated.

"We have taken another step forward in this half and we intend to build on this."

More from Morningstar

Earnings head south for South32

• Perpetual lifts profit despite tough markets


Nicholas Grove is a Morningstar journalist.

© 2016 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written content of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.