In its full year results report released this morning, fizzy beverage bottler and distributor Coca-Cola Amatil (ASX: CCL) reported overall sales up by 6.2% and and 5% growth in net profit, in line with chief executive Terry Davis' stated goal for 2012 of mid to high single digit earnings growth.
As usual, the company's Indonesian and Papua New Guinea sales were particularly strong growers, with volumes up by 10.3% and EBIT growth of 16.8%. In Australia, volumes and EBIT grew by a more modest but still respectable 3.3%.
However, the company's earnings in New Zealand and Fiji fell 11%, with the cool, wet Kiwi summer seen to be at fault. Additionally, the high Australian dollar weighed on CCA packaged foods segment SPC Ardmona, forcing CCA to take non-cash write-downs of nearly $100 million. Including these significant items, the company's net profits declined by 22%.
The high Aussie dollar and the supermarket duopoly
Just yesterday Davis announced his support for a national debate over the practices of Wesfarmers' supermarket Coles (ASX: WES) and Woolworths' (ASX: WOW) treatment of their suppliers. In this, Davis echoed Goodman Fielder (ASX: GFF) chief executive Chris Delaney, who has said Goodman Fielder may not renew its contract, expiring June 30 this year, with Coles to supply the chain with its $1 bread.
Yet Davis also said that the two giant supermarket chains weren't solely responsible for the squeeze that suppliers are feeling. He also cited cheap imports, particularly of fresh fruit from Thailand, Vietnam and South Africa, as affecting SPCA's sales and margins.
In the coming year, the company plans to continue to focus on bringing down costs in the SPCA business. CCA also plans to introduces a line of "better for you" products during the year, in an effort to get past its image as solely a purveyor of sugary beverages, and will reenter the domestic beer market in December 2013 through its partnership with Yellow Tail winemaker Casella.
Full year dividends rise 13%
CCA will pay a final dividend of 32 cents a share, franked at 75%, and will also pay a special unfranked dividend of 3.5 cents. This brings the company's total full year dividend to 59.5 cents a share, a 13% over the total 2011 dividend.
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The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool writer/analyst Catherine Baab-Muguira does not own shares in any of the companies mentioned in this article.
