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Coca-Cola Amatil’s annual profit dips by 25%

DBR Staff Writer Published 18 February 2015

Australian drinks company Coca-Cola Amatil Ltd’s underlying profit declined by a quarter (25.3%) to AUD375.5m ($292.8m) in the 12 months ending December due to drop in volumes of soft drinks.

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The firm's core brands saw dip in sales in supermarkets and convenience stores. Pricing pressure and surging costs in Indonesia impacted the margins further.

Coca-Cola Amatil cut its final dividend by 31% to 22 cents.

The company, in which The Coca-Cola Co owns 29% stake, has been facing pressure to boost earnings following an 80% dip in profits a year ago.

Profits at its domestic drinks division fell 21.3% and "gains in the energy, sports and dairy categories [were] insufficient to offset declines in carbonated beverages".

Its group sales revenue dropped by 1.9% to A$4.94bn ($3.84bn).

Coca-Cola Amatil in a statement said that it is now focusing on mid-single digit earnings growth over the next few years and does not expect any further decline after 2014.

The company's CEO Alison Watkins said: "We are confident that the combination of revenue and cost initiatives we have underway will restore the business to growth."

Under Watkin's leadership, the beverage manufacturer has taken up a restructuring program to reduce costs and wrest back losing market share.

In October, the firm's US-listed backer announced that it would help out by acquiring a minority stake in the struggling Indonesian business for $500m, reported Reuters.

Image: Coca-Cola Amatil, in which The Coca-Cola Co owns 29% stake, has been facing pressure to boost earnings following an 80%dip in profits a year ago. Photo: courtesy of tiverylucky/Freedigitalphotos.net.