Profit slumps at Harvey Norman

HARVEY Norman's half year profit has dropped by 36 per cent because of weaker sales and falling property values.

The retailer made a net profit of $81.9 million in the six months to December 31, down from $128.95 million in the previous corresponding period.

Total sales in the six months to December fell by 7.3 per cent from the previous corresponding period, to $2.88 billion.

The value of the company's properties dropped by $31.5 million in the six months to December, mainly due to losses on the value of three recent developments.

Chairman Gerry Harvey said retail conditions were still tough, but offered some optimism for the future.

"The aggressive discounting experienced in the second half of 2012 has stabilised and pleasingly we are seeing an uptick in sales," he said in a statement.

"Interest rates are at historical lows which should start moving the consumer back into the buying cycle from the savings cycle."

The company closed nine stores and opened six new stores in the six months to December.

Excluding the impact of new stores and store closures, Harvey Norman's sales in the period dropped by 5.3 per cent from the previous corresponding period.

Like-for-like sales in Australia were down by 6.3 per cent, but were up three per cent in New Zealand.

Harvey Norman declared a fully-franked interim dividend of 4.5 cents per share, down from five cents for the same period in the previous year.

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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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