Coca-Cola Amatil’s half-year results show ‘encouraging signs’ in Australian Beverages

Coca-Cola Amatil’s half-year results show a strong performance in New Zealand, with the Australian market showing “encouraging signs”.

The half yearly results for 2018, delivered a statutory net profit, after tax, of $158.8 million.

Coca-Cola Amatil group managing director Alison Watkins said the results included an excellent performance in New Zealand and strong performances in Fiji.

There were some encouraging signs in Australian Beverages, with revenue growth and an improving volume trajectory in both sparkling and still beverages, said Watkins.

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“The stabilisation of revenue and volume in Australian beverages is consistent with our plans to reinvest cost savings in 2018, as part of the Accelerated Australian Growth Plan. While there is more to be done, we’re pleased with our progress,” she said.

“In Australian beverages we saw volume growth in low and no sugar cola and an increase in value share driven by the transition to Coca-Cola No Sugar. This was accompanied by volume growth in water as well as in sports drinks,” said Watkins.

“We also delivered strong growth in our double down growth areas of energy, adult sparking and value-added dairy. We’ve seen continued good performance from businesses such as New Zealand, Fiji and alcohol and coffee,” she said.

The Indonesian business transformation strategy had not been sufficient to offset soft market conditions, said Watkins.

The business has continued to invest in manufacturing facilities, cold-drink equipment and the rollout of its route-to-market model.

Papua New Guinea delivered revenue and EBIT growth despite cycling favourable economic conditions from the national election in the first half of 2017 and experiencing some operational issues.

The review of SPC growth options coincides with the completion of a four-year, $100m co-investment in SPC in conjunction with the Victorian Government, which included $22m by the Victorian Government and $78 million by Coca-Cola Amatil.

“We believe there are many opportunities for growth in SPC, including new products and markets, future efficiency improvements, and technology and intellectual property. The review will look at how this growth could be unlocked, potentially through a change in ownership, alliances or mergers,” said Watkins.

“Our outlook is broadly consistent with what we presented previously and we remain committed to our shareholder value proposition,” she said.

New Zealand, Fiji and alcohol and coffee are expected to continue delivering growth in line with Coca-Cola’s shareholder value proposition.

In Australia, the Accelerated Growth plan will see continued investment across marketing, execution, cold drink equipment, technology and price.

“This investment, along with the uncertain impact of container deposit schemes in Australia and soft market conditions in Indonesia, will impact Group near-term earnings,” said Watkins.