Posted by Rita Mu
Coca-Cola Amatil (CCA)’s Australian business is off to a solid start this year, with volume and revenue in the first four months of 2011 reportedly ahead of last year.
While natural disasters such as Cyclone Yasi and the floods in Queensland and Victoria have impacted demand and led to a short-term increase in operating costs, CCA says its Project Zero investments have partially offset these impacts and are driving expectations in Australia to around five per cent growth for the first half of 2011.
“The business continues to deliver efficiency, service and revenue gains ahead of internal targets from the strong pipeline of capital projects,” says CCA’s Group Managing Director, Terry Davis, in a trading update statement last Wednesday.
“2011 is expected to be a peak year for capital expenditure, with expectations of an overall spend of around $375 million on capacity and capability movements.”
The company’s Indonesian and Papua New Guinea (PNG) businesses are also expecting economic growth for the first half of 2011. Growth in the PET bottle self-manufacturing sector in the regions is expected to drive local currency earnings up to about 10 per cent for the first half of the year.
Despite the Christchurch earthquake, which led to short-term increases in operating costs, CCA says it is expecting to match local currency earnings of those achieved in the first half of last year in New Zealand.
Earnings from the company’s SPC Ardmona business are expected to be five per cent lower than for the first half of 2010 due to the strong Australian dollar, which has led to increased competition from cheaper imported and private label, says CCA.
However, the company’s Pacific Beverages business is expected to grow this year, with Peroni and Bluetongue reportedly already ahead of target as a result of the increased production of draught beer at the new Bluetongue brewery in New South Wales.
Image: thebull.com.au