Coca-Cola Amatil bubbles up with enthusiasm

Coca-Cola Amatil reiterated its earnings guidance for the second half of 2009 after reporting solid third quarter revenue and volume growth across all business units. CCA said today it is confident its previous guidance of high single digit growth in both earnings before interest and tax and net profit after tax for the second half will be achieved. The guidance assumes a normal summer trading season in Australasia in November and December which account for around 20 per cent of the company’s trading revenue.

CCA said its Australian beverage business achieved solid volume and revenue growth in the third quarter and robust transaction growth. Higher consumer demand in New Zealand, combined with a 5 per cent price rise in July, had a positive effect on earnings. The New Zealand and Fiji units now expected to deliver modest local currency earnings growth for the second half of 2009, CCA said in a statement to the market. Strong volume growth was also experienced by CCA’s Indonesia, Pacific Beverages and Food and Services units, with SPC Ardmona still on track to deliver full year savings of around $8 million from the rationalisation of its manufacturing sites in the Goulburn Valley.

Pacific Beverages’ customers’ strong support for the Russian Standard premium vodka range, launched in July, meant initial sales exceeded forecasts, CCA said. Pacific Beverages’ Bluetongue Brewery in NSW remains on track for completion in May 2010, the company added. CCA said the high Australian dollar will reduce full year 2009 earnings growth by about 1 per cent. CCA said depreciation of the Indonesian rupiah against the US dollar and other factors would lead to a double-digit increase in the cost of goods sold in Indonesia during 2009. Overall, the beverage cost of goods sold per unit case in 2009 would rise by between 5 per cent and 6 per cent on a constant currency basis, excluding Indonesia, CCA said. But CCA remained on track to recover its cost of goods increases in 2009, the company said. Capital expenditure in 2009 would be about 7.5 per cent of revenue before CCA lifts capital expenditure in 2010 to 8.5 per cent of sales revenue. CCA said it would invest around $45 million in 2010 in the manufacture of PET bottles at its Northmead facility in NSW. The company’s tax rate for full year 2009 would be around 30 per cent, CCA said. CCA will post its full year 2009 results on February 16, 2010.

Source: AAP

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