Coca-Cola Amatil braces for profit fall
Shares in the Coca-Cola bottler slid 5 per cent on news of the watered-down earnings guidance, with the company also blaming poor economic data from Indonesia where it has a sizeable presence.
The stock closed 61¢ lower at $12.28.
Woolworths and Coles have also warned recently that consumer sentiment had not improved much since the election on September 7, and that spending by shoppers remained at pre-election lows.
Coca-Cola Amatil, which owns a portfolio of non-alcoholic and alcoholic drink brands, said that despite improvement in its local business in the third quarter, fourth-quarter trading was not showing the expected post-election rise.
"The non-grocery business has continued to grow volumes in the second half. However, consumer demand has been more subdued than expected," managing director Terry Davis said in the company's November trading update.
"While we have seen some improved momentum in the Australian grocery channel, with carbonated beverages returning to growth and an improvement in market share, aggressive competitor pricing activity has continued, which has limited price realisation in the half to date."
At the release of CCA's interim result in August, Mr Davis said discounting with the release of Pepsi Next had disrupted the cola market.
Coca-Cola Amatil said in the wake of the continued lull in consumer spending the company expected a 5 to 7 per cent decline in full-year earnings for its 2013 year, as well as a fall of about 1 per cent in earnings due to the weaker Indonesian rupiah and PNG kina.
It said third-quarter demand in Indonesia had slowed as the economy adjusted to higher inflation.
"The fundamental drivers of increased consumption per capita of commercial beverages remain strong and, for 2013, we would expect the Indonesian business to deliver low double-digit volume growth and earnings growth."
As part of its re-entry into the Australian beer market after a two-year absence, Coca-Cola Amatil said it had signed a deal to distribute US craft beer Samuel Adams in Australia from mid-December.
"With just over a month left until CCA re-enters the beer and cider market in Australia, we are ready to hit the ground running with a great portfolio of beer and cider brands," Mr Davis said.
The company said it was still searching for a successor to Mr Davis, who plans to step down as chief executive at the end of next August.
Adele Ferguson— Page 24
Frequently Asked Questions about this Article…
Coca-Cola Amatil is anticipating a 5% to 7% decline in full-year earnings due to weaker-than-expected consumer demand following the federal election and poor economic data from Indonesia, where the company has a significant presence.
Coca-Cola Amatil is anticipating a 5% to 7% decline in full-year earnings due to weaker-than-expected consumer demand following the federal election and poor economic data from Indonesia, where the company has a significant presence.
Shares in Coca-Cola Amatil fell by 5% after the announcement of the reduced earnings guidance, closing 61 cents lower at $12.28.
Shares in Coca-Cola Amatil fell by 5% following the announcement of the reduced earnings guidance, closing 61 cents lower at $12.28.
The Indonesian economy has affected Coca-Cola Amatil's performance due to slowed demand as the economy adjusts to higher inflation, contributing to a projected 1% decline in earnings.
The Indonesian economy has affected Coca-Cola Amatil's performance due to slowed demand as the economy adjusts to higher inflation, contributing to a projected 1% decline in earnings due to the weaker Indonesian rupiah and PNG kina.
Coca-Cola Amatil's Australian business showed some improvement in the third quarter, with carbonated beverages returning to growth and an increase in market share, although aggressive competitor pricing has limited price realization.
Despite current challenges, Coca-Cola Amatil expects its Indonesian business to deliver low double-digit volume growth and earnings growth in 2013, driven by strong fundamental drivers of increased beverage consumption per capita.
Coca-Cola Amatil is re-entering the Australian beer market after a two-year absence and has signed a deal to distribute US craft beer Samuel Adams in Australia starting mid-December.
Coca-Cola Amatil is re-entering the Australian beer market by signing a deal to distribute US craft beer Samuel Adams in Australia from mid-December, as part of its strategy to expand its portfolio of beer and cider brands.
Coca-Cola Amatil is facing challenges in the cola market due to discounting and the release of Pepsi Next, which has disrupted the market.
Coca-Cola Amatil is facing challenges in the Australian grocery channel due to aggressive competitor pricing, which has limited price realization despite some improved momentum and growth in carbonated beverages.
Yes, Coca-Cola Amatil is searching for a successor to Terry Davis, who plans to step down as chief executive at the end of next August.
Coca-Cola Amatil is currently searching for a successor to Managing Director Terry Davis, who plans to step down as chief executive at the end of next August.
Despite current challenges, Coca-Cola Amatil expects its Indonesian business to deliver low double-digit volume growth and earnings growth for 2013, driven by strong fundamental drivers of increased consumption per capita of commercial beverages.
The cola market has been disrupted by discounting, particularly with the release of Pepsi Next, which has impacted Coca-Cola Amatil's market dynamics.
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