Coca-Cola Amatil Ltd., Australia’s biggest soft-drink maker, increased second-half profit 9.8 percent on rising demand in Indonesia and new products in Australia that limited the impact of cooler summer weather.
Net income rose to A$284.6 million ($285 million) in the six months ended December, from A$259.2 million a year earlier. Second-half figures were calculated by subtracting first-half earnings from the A$497.3 million full-year profit the Sydney- based company reported today.
Focusing on more profitable drinks such as Glaceau Vitaminwater enabled the company to boost Australian earnings and widen profit margins even as sales dropped 2.9 percent on stalling consumer demand and cool weather. Chief Executive Officer Terry Davis said a first-half earnings forecast will be made at the company’s annual shareholder meeting in May.
“We have put so much investment in cold drinks and in 2011 we expect a pickup in the second half,” Davis, 53, said in a telephone interview today. “It’s hard for me to see the weather getting any worse for us.”
Earnings before interest and tax from Australia rose 5.4 percent to A$319.9 million in the second-half as the company installed more drink coolers in stores to drive sales.
Coca-Cola Amatil climbed 2.7 percent to A$11.68 at the 4:10 p.m. close of Sydney trading and has gained 7.6 percent this year compared with a 2.1 percent rise in the benchmark S&P/ASX 200 index. The company is 30 percent owned by Atlanta-based Coca-Cola Co., the world’s biggest soft-drink maker.
Indonesia and Papua New Guinea recorded a 22 percent rise in profit to A$57 million on sales of more profitable soft drink packs. New Zealand and Fiji posted a 2 percent decline in earnings to A$44.6 million amid weaker consumer demand and higher taxes that increased shelf prices.
The food and services unit, which includes Australia’s largest fruit canner, had an 8.5 percent fall in profit to A$47.1 million as gains in the nation’s currency made competing imported products cheaper.
To contact the reporter on this story: Robert Fenner in Melbourne at email@example.com
To contact the editor responsible for this story: Frank Longid at firstname.lastname@example.org