Coca-Cola Amatil 1st Half Profit Rises Nearly 8%

   By Mike Cherney 
 

SYDNEY--Coca-Cola Amatil Ltd. (CCL.AU), which manufactures and distributes Coke products in Australia, said its net profit rose 7.8% in the first six months of 2016, reflecting solid growth in its Indonesia division despite weakness in Australia.

The company reported a net profit of A$198.2 million Australian dollars (US$151.2 million), up from A$183.9 million in the first half of 2015. The result comes as the company, like other beverage makers globally, grapples with shifting consumer preferences away from sugary, carbonated soft drinks in favor of healthier options like bottled water.

The reported profit is above the A$192.6 million median of five analysts polled by The Wall Street Journal. The company didn't provide any specific guidance for the second half of its financial year.

"Consumer tastes and trends in Australia are continuing to evolve and our focus over the last two years has been on rebalancing our full portfolio," Managing Director Alison Watkins said. "We are moving to meet consumer demands with a greater focus on portion size and product reformulations in sparkling and increased investment in stills."

The company's first-half sales revenue rose nearly 3% to A$2.52 billion. It also announced a dividend of 21 Australian cents per share, up 5% compared to the 20 cents per share dividend announced last year at this time.

Earnings before interest and tax in Australia, its largest market by far, totaled A$218 million, down about 2% from the A$222.2 million in the first six months of 2015.

Some analysts expected to see strong growth in the company's Indonesia and Papua New Guinea division, a region that has more than 10 times the population as Australia. Earnings before interest and tax in that region rose 65% to A$37 million, from A$22.4 million in the first half of 2015.

Slowing economic growth last year in Indonesia presented a challenge, but the growth rate has accelerated since then. Coca-Cola Amatil sold a A$500 million stake in its Indonesia business to Coca-Cola Co. in 2014, with the money earmarked for capital expenditures like factories and warehouses.

-Write to Mike Cherney at [e-mail]

(END) Dow Jones Newswires

August 25, 2016 19:50 ET (23:50 GMT)

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