Coca-Cola Amatil Profit Rises on Sale of Beer Division

Coca-Cola Amatil Ltd. (CCL), Australia’s biggest soft-drink maker, posted a 54 percent rise in second- half profit as a one-time gain from selling its beer unit to SABMiller Plc (SAB) outweighed the effect of stalling domestic demand.

Net income rose to A$438.2 million ($467 million) in the six months ended Dec. 31 from A$284.6 million a year earlier. Second-half figures were calculated by subtracting first-half earnings from the A$591.8 million full-year profit the Sydney- based company reported today.

Cooler summer weather in Australia’s eastern states combined with stalling consumer spending to crimp sales in the company’s biggest market. The result was helped by a A$170.3 million gain from the sale of Coca-Cola Amatil’s stake in the Pacific Beverages beer business to SABMiller, and it may exercise an option to buy spirit assets from the London-based brewer.

“Considering the weather it’s a pretty consistent performance,” David Cooke, an analyst at Nomura Holdings Ltd. in Sydney, said by phone yesterday. “A quality company like this should be able to deliver high single-digit or low double- digit earnings growth.”

The full-year profit of A$591.8 million beat the A$573 million average of nine analyst estimates compiled by Bloomberg.

Excluding items, profit for 2011 rose 5 percent to A$532 million, it said.

Most Challenging

The past 12 months were “undoubtedly the most challenging year the business has faced in over a decade,” Chief Executive Officer Terry Davis said in the statement.

Coca-Cola Amatil shares fell 0.3 percent to A$12.08 at 12:02 p.m. in Sydney. The benchmark S&P/ASX 200 index declined 0.2 percent.

The company agreed in December to sell its stake in the Pacific Beverages beer venture for A$305 million to clear the way for SABMiller to complete its A$10.5 billion acquisition of Foster’s Group Ltd.

Coca-Cola Amatil said it expects to spend as much as A$200 million by the middle of this year if it exercises a related option to buy Foster’s spirits and pre-mixed drinks business from SABMiller. It would aim to return to the local beer business as soon as a two-year exclusion period under its agreement with SABMiller lapses.

“While in the short term we may not be able to compete in beer in Australia, we are not restricted in our other markets,” Davis said.

Australian Slowdown

Annual earnings before interest and tax from Australian beverages rose 2.4 percent from a year earlier to A$607.2 million as the cooler weather curbed demand before Christmas. The pace of growth slowed from 7.3 percent in 2010.

Indonesia & Papua New Guinea profit jumped 18 percent to A$88.1 million while earnings from New Zealand & Fiji slipped 2.3 percent to A$80 million. Earnings from the Alcohol, Food & Services unit fell 1.2 percent to A$93.2 million.

One-time items added A$59.8 million to annual profit, with the gain from the Pacific Beverages sale partially offset by A$110.5 million in restructuring costs in its food business as it fired employees and wrote down the value of inventory.

To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net

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