Coca-Cola Amatil will deliver a special dividend following the sale of its SPC business but the group’s Australian operations continue to battle headwinds from container deposit schemes.
The Asia Pacific beverages bottler on Thursday announced a 6.3 per cent rise in first-half profit to $168 million, with group’s trading revenue increasing by 5.2 per cent to $2.43 billion.
Profit from continuing operations slipped by 3.9 per cent to $173.3 million, which the company said it expected, as various container deposit schemes and increased marketing investments weighed on the group’s larger Australian segment.
Coca-Cola Amatil declared an unfranked 25.0 cent per share interim dividend comprising a special 4.0 cent payout following the SPC sale in June.
The company paid a partially franked 21.0 cent per share interim dividend last year.
Managing director Alison Watkins said she was pleased with the group’s performance in New Zealand and Papua New Guinea, and in the alcohol and coffee divisions as the company continued its two-year transformation.
Trading revenue in the Australian segment fell by 0.5 per cent to $1.22 billion during the six months to June 30, while earnings from continuing operations were down 8.3 per cent to $161.6 billion.
Overall volumes declined by 1.2 per cent in Australia, which Ms Watkins said was largely driven by the container refund scheme in Queensland, where net volumes fell by 3.8 per cent.
Excluding Queensland, Australian beverages volumes declined by 0.3 per cent for the half.
The Australian earnings performance also reflected cycling of a $10 million credit in HY18 due to lower actual redemption rates in the NSW container deposit scheme, compared with forecast and lower volumes in Queensland.
An increased spend on the company’s “Feet On The Street” Australian sales force also weighed on the local result but the initiative also showed signs of volume growth in Sydney and Adelaide, where it is at a more advanced stage of implementation.
Ms Watkins said Australian beverages was positioned for growth in 2020 with the completion of additional acceleration investments, and with container deposit schemes in NSW and Queensland substantially embedded.
She also flagged a further reduction of sugar content across the company’s portfolio of sales.
“The continued volume growth in diet and no-sugar Coca-Cola is a testament to consumer enthusiasm for healthier options, and a sign of the strength of our portfolio,” Ms Watkins said.
“We’ve heard the message on consumer wellbeing and we’re delivering with reductions in sugar content.”
COCA-COLA AMATIL LIFTS FIRST-HALF PROFIT
* Net profit up 6.3pct to $168.8m
* Profit from continuing operations down 3.9pct to $173.3m
* Revenue up 5.2 per cent to $2.43b
* Interim dividend of 25.0 cents per share unfranked, including special unfranked dividend of 4.0 cents.