Fashion
CCA has recorded a flat first half profit as earnings from its core Australian business fell, and the Indonesian market did not do as well as expected.
CCA made a net profit of $183.9 million for the six months to July 3, up 0.9 per cent from $182.3 million a year ago.CCA group managing director Alison Watkins said the first half result was consistent with previously provided guidance of no further declines in earnings per share from 2014.”The results were achieved despite trading and economic conditions that were more challenging than we had expected in our two major markets of Australia and Indonesia, demonstrating the effectiveness of our underlying strategy,” Ms Watkins said on Friday.She said CCA was making good progress on improving its business operations, through cost cuts, new products, and increased marketing.
“CCA continues to target a return to single-digit growth in earnings per share over the next few years, with no further decline expected after 2014,” she said.CCA’s annual earnings before significant items fell in calendar 2013 and 2014.In the first half, CCA’s non-alcoholic beverages business in Australia lifted volumes and revenue, but earnings fell 6.1 per cent to $222.2 million partly because of lower prices.CCA said the Australian non-alcoholic beverages business was partly affected by competition in the sports drinks and water categories and an overall decline in demand for carbonated soft drinks.
“We just see the economy, the consumer spending and the consumer behaviour as probably a little bit more tepid than we’d anticipated,” Ms Watkins said.CCA’s non-alcoholic beverages business in Indonesia generated a 46.4 per cent increase in earnings to $22.4 million.But slower economic growth in Indonesia had affected overall consumer purchasing power, so volume growth for the beverages market was tracking below expectations.Ms Watkins said CCA was working to expand its market in Indonesia by broadening its products offering, identifying new consumption occasions, and offering a greater range of affordable packs.Shares in CCA were 22.5 cents, or 2.63 per cent, higher at $8.775 at 1452 AEST.COCA-COLA AMATIL EARNINGS STABLE* First-half net profit of $183.9m, up 0.9 pct* Trading revenue of $2.4b, up 4.9 pct* Interim dividend flat at 20 cents per share, 75 per cent franked
