(Updates with SPC writedown details, share reaction)
SYDNEY Feb 18 Australian soft drink bottler
Coca-Cola Amatil posted an 83 percent fall in full-year
profit on Tuesday, its worst result for 20 years as earnings
were hit by a writedown at its struggling SPC Ardmona fruit
CCA, which has also been hurt by a price war with
Suntory-owned Schweppes, said it will launch a review
of its operating cost structure amid concerns about weak
consumer confidence and spending.
Shares in the company fell 5.5 percent in early trading to
A$11.20, touching a two-and-a-half year low. The stock is down
about 20 percent over the past year.
CCA's net profit fell to A$79.9 million ($72.1 million) from
A$457.8 million a year ago, as it wrote off SPC Ardmona assets
by A$404 million.
The Victorian state government stepped in last week with a
A$22 million subsidy to help bailout out the cannery and
preserve jobs after the federal government rejected pleas from
CCA for a A$25 million grant.
CCA said the writedown reflected the write-off of A$277
million in remaining goodwill, a A$39.7 million writedown in the
value of brand names and a A$87.3 million charge covering
writedowns in inventory, property, plant and equipment.
The bottler and distributor bought SPC for around A$700
million in 2005 and has since invested a further A$170 million
on plant, equipment and technology.
CCA Managing Director Terry Davis said the poor 2013 results
reflected, in part, difficult trading conditions for the
company's Australian beverage business and competition for SPC
from imported private label products.
CCA's Australian beverage business accounts for around 70
percent of its overall earnings, but the company is making a big
push into Indonesia, whose population of 250 million people is
around 10 times the size of the Australian market.
CCA said it expects to deliver volume growth of more than 10
percent in Indonesia in 2014, in line with 2013, but noted
headwinds from a depreciation in the rupiah and high wages and
"While the medium term outlook for volume and earnings
growth in Indonesia continues to be positive, 2014 local
currency earnings growth is expected to be impacted by high cost
inflation," the company said in a statement.
($1 = 1.1080 Australian dollars)
(Reporting by Jane Wardell; Editing by Phil Berlowitz and