CCL Coca Cola Amatil Limited

   By Mike Cherney 
 

SYDNEY--Australian bottler Coca-Cola Amatil Ltd. (CCL.AU) said it had decided to sell its struggling SPC fruit-and-vegetable processing business, and warned that Australian beverage volumes were still tracking lower than last year.

The sale of SPC, which is expected to post a loss in 2018 of 10 million Australian dollars (US$7.3 million), would sharpen the company's focus on beverages and comes after a strategic review. But Amatil's core business, sugary soft drinks, has also struggled as consumers look for healthier options. The company said Friday that second-half volumes in its main Australian beverages unit were still tracking slightly below last year.

Amatil also said that performance in Indonesia, previously a bright spot for the company, was being impacted by soft demand, cost pressures and a weak currency. It also added that the reinvestment of A$40 million in cost savings for Australia would impact the 2018 result, along with new container deposit schemes in some Australian states.

Looking further ahead, the company said 2019 would be another transitional year due to more investment in the Australian and Indonesian businesses.

"Overall, we remain committed to our Shareholder Value Proposition targeting a return to mid-single digit earnings per share growth in the medium term," said Managing Director Alison Watkins. "This will depend on the success of revenue initiatives in Australia, Indonesian economic factors and regulatory conditions in each of our markets."

The company offered the update as it held an investor day on Friday. It also said that its New Zealand and Fiji unit and its alcohol and coffee unit were expected to deliver growth in line with previous expectations.

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

(END) Dow Jones Newswires

November 29, 2018 17:19 ET (22:19 GMT)

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