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Earnings slip weighs on CCA's HY profit

Simone Ziaziaris  |  23 Aug 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] Coca-Cola Amatil (ASX: CCL) has suffered a 29.3 per cent drop in half-year profit, dragged down by a slip in earnings as challenging trading conditions weigh on its Australian soft drinks division.

The soft drink company made $140.1 million in net profit for the six months to June 30, down from $198.2 million a year ago, while trading revenue fell 3.7 per cent to $2.42 billion from $2.52 billion.

CCA said Australian beverages performance to April was hurt by competitive pressure in the cola and water categories and the impact of higher costs of goods sold.

Australian beverages trading revenue fell 5.1 per cent to $1.23 billion, while underlying earnings fell 13.2 per cent to $182.9 million.

Managing director Alison Watkins said while challenges remain, there were encouraging signs with performance improving since Easter as initiatives gain traction.

"Since Easter we have seen pricing pressure in sparkling beverages ease compared to the prior half and volume in branded water has grown with investment in price in the last few months," Ms Watkins said, adding energy and dairy drinks also performed positively for the half year.

CCA's earnings from its New Zealand and Fiji, Indonesia and Papua New Guinea and Alcohol and Coffee divisions were strong despite soft economic conditions in some markets.

The Indonesia and Papua New Guinea division lifted earnings 41.4 per cent to add $13.7 million to the company's total earnings.

Coca-Cola said it expects underlying net profit for the full-year to be broadly in line with last year's $417.9 million.

CCA shares were down 2.7 per cent to $8.24 in early trade.

SOFT EARNINGS FOR AUST SOFT DRINKS IN CCA H117

* Net profit down 29.3pct to $140.1m

* Revenue down 3.7pct to $2.42bn

* Interim dividend of 21 cents, 70pct franked, from 21 cents, 75pct franked in H116

 

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