Coca-Cola Amatil Warns on Profits, Launches Strategic Review

   By David Rogers 
 

SYDNEY--Coca-Cola Amatil Limited (CCL.AU), 29%-owned by the U.S. beverage giant, said it has begun a strategic review of its food and drinks operations after warning on half-year profits.

Coca-Cola Amatil cited weakness in Australia, where it has struggled to recover its costs during a price war with rival drinks makers, and Indonesia for a likely 15% fall in earnings before interest and tax in the six months through June.

"At this early stage of the year, expectations would be for challenging trading conditions to continue," said Ms. Watkins, Coca-Cola's managing director.

The profits warning was one of the first announcements made by Ms. Watkins., a former chief executive of GrainCorp Ltd. (GNC), to investors since replacing Terry Davis as managing director of Coca-Cola Amatil in March.

In February, Coca-Cola Amatil said its annual profit fell 83% after it wrote down the value of its fruit processing business SPC Ardmona. At that time, the company said it was concerned by weak consumer confidence and spending in Australia.

Ms. Watkins gave few details about the strategic review, other than it would seek ways to cut costs and boost productivity. Early findings from the review would be outlined to investors at the company's annual general meeting in May.

Write to David Rogers at [e-mail]

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