Coca-Cola Amatil reports a near 16 per cent profit fall, amid a shift from soft drinks to healthier alternatives.
The company’s net profit after tax fell 15.6 per cent over the half-year to June 30 fell 15.6 per cent to $182.3 million.
Coca-Cola Amatil (CCA) says the fall in profit came despite a very slight rise in revenue to $2.38 billion.
The company says its earnings are in line with an update provided in April, which caused CCA’s share price to slump by double-digits on the day it was announced.
CCA says a 14.1 per cent slide in Australian beverage earnings was a key factor behind the fall in profit, citing aggressive competitor pricing and private label competition as denting profits.
The company’s new managing director Alison Watkins, who replaced long serving boss Terry Davis earlier this year, says a strategic review she has undertaken aims to turn around performance in this key market.
“The beverage landscape, particularly in Australia and New Zealand, has been evolving over the past five years with increased competition from existing players, greater penetration of value and private label products, a shift towards ‘better for you’ products and the continued consolidation of the customer base in both grocery and national accounts,” she said.
“As a business we have been slow to adapt to these changes in market conditions and shifting consumer trends.”
In its overseas markets, CCA says Indonesian volumes continue to grow strongly but rapidly increasing costs and a decline in the Indonesian rupiah saw before tax profit falls to $5.2 million from $31.4 million last year.
Investors appear to be less than confident in the turnaround plans, pushing CCA shares down 4.4 per cent to $9.31 by 10:32am (AEST).