Coke Bottler Surges as Nigeria, Ukraine Offset Russia Woes

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Shares in Coca-Cola HBC AG surged after the second-largest bottler of Coke products said strong sales in Nigeria, Romania and Ukraine were more than making up for its struggles in Russia, the company’s biggest market.

While revenue at the Switzerland-based distributor fell 1 percent in the first half of 2015 because of currency effects, net income increased 31.7 percent to 125 million euros ($139 million), the company said in a statement Thursday. Sales volume rose 3.8 percent.

Coca-Cola HBC’s share price has closely tracked the ruble since the start of the year, a phenomenon that’s also affected Carlsberg A/S, Russia’s largest brewer. “Russia counts for about 80 to 90 percent of our FX negative impact,” Chief Financial Officer Michalis Imellos said on a conference call.

However, on Thursday the coke bottler’s shares rose more than 10 percent in London after Chief Executive Officer Dimitris Lois said in the statement he’s become “more optimistic as the year has progressed” about volume and margin growth. This is despite “difficult conditions in many of our markets, particularly Russia.”

The bottler buys concentrate from Atlanta-based Coca-Cola Co. and sells the products in Europe, Russia and Nigeria. It is listed in London and Athens and has a market value of 7.5 billion euros.

Significant pressure on Russian consumer confidence, household incomes and the ruble threaten future headwinds for the company, George Doukas, an analyst at Piraeus Bank SA in Athens, said in a telephone interview ahead of the results.

Last week Coca-Cola Enterprises Inc., another bottler of Coke products in Europe, agreed to a three-way merger with two other distributors in the region creating the largest independent bottler for the famed soda brand.

Lois said on the conference call that he “fully endorsed” such mergers where they made sense but saw “no further consolidation” for his company at this time.

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