Coca-Cola Amatil Slumps on Earnings Forecast Cut: Sydney Mover
The bottler fell 6.8 percent to A$13.57 at 10:44 a.m. in Sydney today, headed for its biggest drop since February 2009, after reporting earnings before interest and tax in the six months ending June would drop 8 percent to 9 percent. The company had previously forecast earnings growth over the full 2013 financial year, and said today that it expects growth to resume in the second half.
Australian food and drink suppliers have been squeezed by competition between the country’s two largest supermarkets, Woolworths Ltd. and Wesfarmers Ltd.-owned Coles, which together control about 80 percent of the nationwide grocery market. The Australian dollar’s longest run above parity with the U.S. dollar since at least 1983 has also encouraged cheaper food imports, hurting Amatil’s SPC Ardmona packaged foods business.
“The grocery channel has experienced a very difficult start to the year due to the continuation of higher levels of competitor discounting,” Terry Davis, managing director, said in a trading update released for the company’s annual shareholder meeting in Sydney today. “SPC Ardmona earnings have been materially impacted by increased importing of private label packaged fruit by retailers.”
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