More fizz to come from new products

COCA-COLA Amatil says new products will boost its performance in the second half of 2017 after its first-half profit dropped 29 per cent because of weaker soft drink and water sales.

The company launched Coca-Cola No Sugar and Keri Juice Blenders in June in a bid to lift its Australian beverages division, which has been hurt by increasing competition and discounting.

Sales volumes in the company’s largest division in the six months to June were down 3.9 per cent from a year earlier, revenue fell 5.1 per cent and underlying earnings dropped 13 per cent.

Managing director Alison Watkins said challenges remained, but drinks sales in Australia had improved since Easter.

“We did get off to a difficult start to the year and we have seen, I would say, a steady improvement since then and a return to more normal conditions,” Ms Watkins said. “A couple of very significant new product launches are really helping our momentum.”

Coca-Cola Amatil’s earnings improved in New Zealand and Fiji, Indonesia and Papua New Guinea and in its alcohol and coffee division, but that was unable to offset its Australian division. The company’s interim net profit of $140.1 million was down from $198.2 million a year ago.

It expects its full-year underlying profit will be in line with the previous year’s $418 million, a forecast that would require about 4 per cent growth in the six months to December. Its interim division of 21¢ was unchanged from a year earlier.

Coca-Cola Amatil First-half results

29.3% Revenue: $2.47bn down 3.8% EPS: 18.5¢ down 28.8% Dividend (interim): 21¢