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LONDON (Alliance News) - Coca-Cola HBC AG Wednesday said its sales and volume decline improved in the fourth quarter, but still posted a drop in both for the full year.
However the bottling group's pretax profit for 2014 was up on the year before on the back of lower finance costs and a one-off disposal gain.
The company, which is the world's second-largest Coca-Cola bottler and amongst the largest beverage distributors in Europe, cited a "challenging" year ahead, having been hit in 2014 by volume weakness due to political unrest in Russia, Ukraine and Greece, as well as weak demand in Romania.
Coca-Cola HBC reported pretax profit of EUR51.5 million for the final three months of 2014 to end-December, compared with a pretax profit of EUR11.1 million the year before, after profits were supported by lower net finance costs, and were boosted by a EUR52.7 million gain from a disposal. Net sales revenue fell 4.1% to EUR1.51 billion in to the quarter, from EUR1.57 billion. Volume increased 0.8% in the quarter.
In October last year, Coca-Cola HBC sold its interest in Bulgarian brewer Zagorka AD to Heineken. The consideration for Coca-Cola HBC amounted to EUR76.5 million, with a total net gain of EUR59.9 million.
For 2014 as a whole, the Coca-Cola HBC posted a pretax profit of EUR352.0 million, up from EUR294.1 million in 2013. Excluding finance costs and the one-off profit gain, its operating profit dipped in 2013 to EUR361.1 million from EUR373.7 million in 2013. Net sales revenue for the year were down 5.3% at EUR6.51 billion from EUR6.87 billion, with volume down 2.8%.
The group operates in 28 countries, but generates its biggest profit and revenue from emerging market countries. However, it is seeing its biggest volume declines from these.
"In 2015, we will continue to pursue our strategy with a wide range of planned actions, from improving volumes through marketing initiatives and focusing on affordability to our proven self-help efficiency measures," said Chief Executive Dimitris Lois in a statement.
"These efforts, along with materially reduced input costs, will help to mitigate the negative impacts of currency volatility, and related uncertainty in some key markets. We anticipate a challenging year and are optimistic that our business will prove its strengths in adversity," Lois added.
The group proposed a full-year dividend of EUR0.36 per share, up from EUR0.354 in 2013.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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