August 22, 2018 / 1:19 AM / a month ago

UPDATE 1-Australia's Coca-Cola Amatil says open to sale of packaging unit SPC

(Adds share move, background on SPC)

Aug 22 (Reuters) - Australia’s Coca-Cola Amatil said on Wednesday it was looking into the potential sale of its fruit and vegetable packaging unit after the loss-making business contributed to a drop in its first-half revenue.

The bottler bought the unit, SPC, for around A$700 million (US$510 million) in 2005 and is reviewing its options following the end of its four-year joint investment of A$100 million into the unit with the Victorian government.

Coca-Cola Amatil reported a nearly 13 percent jump in first-half net profit on Wednesday, but total revenue fell slightly due to weak trading revenue for its corporate food and services segment, to which SPC belongs.

Shares of Coca-Cola Amatil jumped 5.8 percent in morning trade, while the S&P/ASX 200 index was slightly weaker.

“The review will look at how this growth could be unlocked, potentially through a change in ownership, alliances or mergers,” said Alison Watkins, managing director of Coca-Cola Amatil.

Coca-Cola Amatil cited rising competition and the exit of some private labels from SPC as factors contributing to a 4 percent fall in the unit’s trading revenue.

It said the review would not affect its ongoing sale process relating to the Taylors and IXL brands, announced in early 2018. ($1 = 1.3669 Australian dollars) (Reporting by Nikhil Kurian Nainan in Bengaluru; editing by Richard Pullin and Chang-Ran Kim)

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