CCL Coca Cola Amatil Limited

   By Mike Cherney 
 

SYDNEY--Australian bottler Coca-Cola Amatil Ltd. (CCL.AU), which is battling a consumer shift away from sugary carbonated beverages, said first-half net profit rose by 13% after one-time items a year ago weren't repeated.

Statutory net profit, which includes the one-time items, for the six months to June 29 was 158.1 million Australian dollars (US$116.4 million). Before including one-time items, however, underlying net profit declined 6% to A$178.8 million. Revenue was about A$2.4 billion, roughly flat on the year.

Coke Amatil also said it would start a strategic review of its SPC packaged-fruit-and-vegetable unit, and that it would include exploring a sale or merger for the unit. The company said SPC recorded a "modest loss" in the half year.

Looking ahead, Coke Amatil said it would continue to target a return to mid-single digit earnings per share growth in the medium term. However, it said near-term earnings would be negatively impacted by accelerated reinvestment in its struggling Australia unit, the impact of container deposit schemes in Australia, and soft market conditions in Indonesia, which previously had been a growth driver for the company.

Underlying earnings before interest and tax, or EBIT, fell by nearly 4% in the main Australian beverages unit and declined by 0.2% in the Indonesia and Papua New Guinea unit. The same metric in alcohol and coffee, however, rose by nearly 5% and it rose by 9% for New Zealand and Fiji.

Amatil has responded to the anti-sugar sentiment by rolling out new sugar-free products, such as Coke No Sugar, and has focused on growth in its alcohol and coffee segment. In the recent half year it said there were "encouraging signs" in the Australia business.

-Write to Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

August 21, 2018 19:44 ET (23:44 GMT)

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