Coca-Cola loses fizz as profit slumps

CCA made a net profit of $459.9 million in the year to December 31. Picture: File Source: Getty Images

BEVERAGE company Coca-Cola Amatil's (CCA) annual profit has fallen by 22 per cent as it deals with weak consumer spending and the high Australian dollar.

CCA made a net profit of $459.9 million in the year to December 31, down from $591.8 million in the previous corresponding period.

The result included $98.5 million in writedowns, related to its SPC Ardmona business, which has struggled to compete against supermarket labels and imports due to the high Australian dollar.

CCA's net profit before significant items was $558.4 million, up five per cent from $532 million in the prior corresponding period, in line with the company's previous forecasts.

Managing Director Terry Davis said volume and earnings in the company's Australian business was solid given a difficult trading environment.

"Earnings growth was moderated by disappointing performances from New Zealand and SPC Ardmona, with the ongoing impact of the high Australian dollar on the competitiveness of SPC Ardmona leading to a writedown of assets and goodwill in the business," he said in a statement.

Earnings in Australia rose 3.3 per cent from the corresponding period to $627.4 million, while earnings in New Zealand and Fiji dropped 12 per cent to $70.1 million.

The company's operations in Indonesia and Papua New Guinea posted earnings growth of 17 per cent on the previous corresponding period, to $103 million.

Significant investments had been made in those countries in anticipation of a new product and package pipeline in 2012, CCA said.

Mr Davis said Australian revenue and earnings were expected to grow in 2013.

"We do, however, remain concerned by the generally weak consumer spending environment which has persisted for the last two years," he said in a statement.

Momentum in PNG and Indonesia would continue in 2013, with revenue there expected to exceed $1 billion for the first time.

The company's expenditure is forecast to reduce from peak levels in 2012, to an average of $350 million to $420 million each year over the next three years.

CCA declared a final dividend of 32 cents per share, franked to 75 per cent.

It will also pay a special dividend of 3.5 cents, taking total dividends for 2012 to 59.5 cents.

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