Coca-Cola HBC 1st Half Operating Profit Rises 11%

By Olga Cotaga

LONDON--Coca-Cola HBC AG (CCH.LN) reported on Thursday an 11% rise in operating profit for the first half of fiscal 2017 and said it expects a "strong growth" in full-year currency-neutral revenue.

The company, which bottles Coca-Cola drinks, said it expects the adverse effect of foreign currencies on operating profit to stay at 115 million euros ($127.5 million) for the year and that it will see higher costs in the second half of 2017.

The bottler said volumes rose 0.1% to 1 billion unit cases in the half year, compared with a 3.8% growth last year, but said it is "confident of volume growth for the year as a whole."

Volumes in established markets was 2.8% lower than last year due to unseasonably cool weather. Developing markets saw a 3.5% volume growth, the company said. In emerging markets, Nigeria, Romania and Serbia were key drivers of the 0.5% volume growth, the company said.

The FTSE-100 company made an operating profit of EUR220.6 million for the six months ended July 3, which is an 11% increase on EUR199.1 million for the same period last year, despite revenue falling 3.4% to EUR3.04 billion from EUR3.15 billion on adverse currency movements. The forex exchange-neutral net sales revenue grew by 2.4% to EUR3.04 million from EUR2.97 million.

In June, the company set new medium-term goals and one aim was to achieve a 4% to 5% average annual revenue growth rate.

Analysts at Citi said the company is "well-positioned" after the U.K.'s vote to leave the European Union because "carbonates are quite resilient...to a weaker economic environment" and because of a strong balance sheet. The bank had a 'buy' rating for Coca-Cola HBC.

Shares closed on Wednesday at 1571 pence.

Write to Olga Cotaga at [e-mail], Twitter @OlgaCotaga

(END) Dow Jones Newswires

August 11, 2016 03:18 ET (07:18 GMT)

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