REPORTING SEASON: Coca Cola Amatil Ltd (CCL)
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Figure 1: Coca Cola Amatil Ltd 12 month chart
Coca-Cola Amatil (CCL) posted a flat result which was still above expectations
– Coca-Cola Amatil (CCL) has posted a modest 0.9% lift in half-year profit to $183.9m. The result was above consensus and largely in-line with the company’s guidance. Earnings growth was non-existent due to difficult conditions in its core Australian division and a slowing Indonesian economy. Despite sluggish profit growth, sales volumes rose in all of its markets (Australia, NZ & Fiji, Indonesia & PNG). CCL is 29% owned by US based Coca-Cola Holdings.
– CCL’s Australian beverage business posted a 6% slide in earnings, but still accounted for 70% of the group’s underlying profit. Volumes rose by 2.8% and the 110bps decline in margins to 16.5% was better than anticipated. CCL has been making an effort to release healthier options to the market, with the April launch of its naturally sweetened Coke Life an example.
– Volumes from its New Zealand and Fiji unit rose by 8.5%, which was above the market’s forecasts while the 7.7% growth in volumes in its Indonesia & PNG business fell well short of expectations. Indonesia’s economy is growing at the slowest pace since 2009, hurting retail spending.
– A 75% franked 20c/s interim dividend was declared, payable to eligible shareholders on 6 October, with an ex-dividend date of 26 August. CCL shares rose following the result but have been heavily sold in the lead up to the report. CCL is down 5% over the year.
– Looking ahead, CCL remains on track with its guidance and is targeting to return to mid- single-digit growth in earnings over the next few years.