Australian soft drink bottler Coca-Cola Amatil Ltd. confirmed forecasts of a weaker 2000 profit performance, saying strong Australian earnings were not enough to offset ongoing volume declines in the …
Australian soft drink bottler Coca-Cola Amatil Ltd. confirmed forecasts of a weaker 2000 profit performance, saying strong Australian earnings were not enough to offset ongoing volume declines in the Philippines. “For C-C Amatil as a whole, net operating profit in 2000 is still anticipated to be below A$ 190.2 million, before abnormals, recorded in 1999,” chief executive officer David Kennedy told shareholders at the annual meeting. “Australia is expected to deliver improvements in volume, revenue and trading profit for full year 2000. In the Philippines, consumer demand remains weak. As a consequence, (Philippines) trading profit for 2000 is expected to be in line with that of 1999,” Kennedy said. Philippines“ first quarter 2000 sales volumes dropped 4.6% compared to a year ago and C-C Amatil plans a further review of its Philippines operations in a bid to find savings. C-C Amatil went into the Philippines in 1998 when food and beer giant San Miguel Corp exchanged its Coke assets for a 21.5% stake in C-C Amatil. Since then San Miguel has signalled it is a seller of its 219.06 million shares, 192.5 million of which are subject to sale restrictions until July 2000. However, Kennedy told the media after the meeting that he was unaware of San Miguel“s plans for its stake. “I am not aware they have any plans. There has been no change as far as I know since their (previous) offer did not go through when they rejected the price,” he said. San Miguel rejected A$ 5.00 a share for its stake in 1999, saying the result of a global bookbuild did not reflect C-C Amatil“s long term value. C-C Amatil shares have fallen from the 1999 high of A$ 7.17 to a seven year low of A$ 3.10 on March 3, 2000. Since then C-C Amatil shares have recovered some ground and were four cents up at A$ 4.25 recently. Kennedy also moved to quell concerns over any cost impact from a reorganization of its 37% shareholder, Coca-Cola Co. “I can say categorically there will be no increase in our costs because of anything Coca-Cola Co. Inc. has announced as their strategic direction,” Kennedy said. In January, Coca-Cola announced it would cut 6,000 jobs, or about 20% of its worldwide workforce, in a bid to decentralize operations and trim costs. The company has since lowered the number of planned job cuts to about 5,200.