SPC loss reported
SPC’s parent company has suffered a profit slump but the company says it sees a strong future for the fruit processor.
The canner has been unable to record a profit in recent years and this year SPC contributed a ‘‘modest’’ loss to its parent company, Coca-Cola Amatil.
The slide in headline profit was due to a $171.8 million after tax writedown on its SPC fruit processing and canning business.
CCA paid $523 million for SPC Ardmona in 2005, when it was turning over about $351 million annually. Its assets were valued about $595 million net in 2005.
CCA managing director Alison Watkins said SPC had continued to progress its program to modernise the business, however continued pressure in core traditional categories resulted in a modest loss for the business.
CCA has written down the value of SPC to $156 million.
‘‘The SPC team has worked hard to deliver on its investment plan objectives and has made significant progress in modernising the manufacturing capabilities to enable us to shift into more profitable snacking products,’’ Ms Watkins said.
‘‘Unfortunately, market conditions, including tougher competition from cheaper imports, has put pressure on the business’ profitability in the short term.
‘‘The need to impair SPC’s carrying value was carefully considered and we believe it is prudent given these headwinds.
‘‘Our joint investment program with the Victorian Government is expected to be completed this year.’’
Coca-Cola Amatil will shut down its South Australian manufacturing plant as the soft drink maker continues reshaping to face a changing and increasingly competitive Australian marketplace.
The company made the shock announcement that it will close its Thebarton plant in central Adelaide in 2019, costing about 180 jobs, as it booked a 37.4 per cent drop in annual net profit for 2016 to $246.1 million.
Ms Watkins said the company had to invest in growing in new market segments as more consumers turned away from full sugar soft drinks.
‘‘We want to invest in our supply chain so that we can play more strongly in the categories that are growing such as dairy, juice and the premium glass end of the beverages spectrum,’’ she said.
SPC continues to face tough competition from imported products but Ms Watkins said CCA remained committed to securing SPC’s future.
‘‘We see a strong future for SPC as it continues to expand its range of products and explore new markets,’’ she said.