Coke result no fizzer, despite headline profit fall

Coca-Cola Amatil has recorded a drop in full year profits, hurt by the strong Australian dollar and weakness in its tinned food business.

Net profit dropped more than 22 per cent to $459.9 million, due to nearly $100 million dollars in expenses at SPC Ardmona.

Those costs include write-downs and restructuring charges, as well as the high dollar and lower fresh fruit prices.

Excluding those items, Coca-Cola Amatil says its annual net profit rose by 5 per cent to $558.4 million.

The company's managing director, Terry Davis, says the result was excellent given the tough trading conditions over the period.

"The standout performer was once again Indonesia and PNG, with double-digit volume and earnings growth, while Australia delivered solid volume and earnings growth and increased market share despite a difficult trading environment," he noted in the report.

"Earnings growth was moderated by disappointing performances from New Zealand and SPC Ardmona with the ongoing impact of the high Australian dollar on the competitiveness of SPC Ardmona leading to a write-down of assets and goodwill in the business."

The company says its Australian soft drink business was solid, despite heavy discounting by its major competitor, and Coca-Cola Amatil increased market share despite a widening of the retail price gap of over 10 percentage points to its nearest rival.

The firm is also anticipating a boost to profits from its re-entry into the Australian beer market in December 2013.

Shareholders will get a special dividend of 3.5 cents for the period, along with a partially-franked final dividend of 32 cents, bringing the total dividend up to 59.5 cents a share for the whole of 2012.

Investors welcomed the special dividend and underlying profit growth, pushing Coca-Cola Amatil shares up 2.2 per cent to $13.93 just after 11:00am (AEDT).

Source: ABC News, 19 February 2013