(Alliance News) - Coca-Cola HBC AG on Thursday posted a drop in profit in the first half of its year due to increased debt, as well as restructuring and acquisitions, which pushed up costs and expenses.
The Coca-Cola drinks bottler's pretax profit for the six months ended June 28 was EUR260.8 million, down 10% from EUR290.1 million the year before.
Operating expenses rose 5.1% to EUR955.1 million, pushed up by acquisition and restructuring costs, with total restructuring costs multiplying to EUR30.2 million from EUR4.0 million.
Moreover, finance costs rose sharply to EUR32.8 million from EUR19.1 million, which the bottler said was "mainly due to the higher level of gross debt and the adoption of IFRS 16 on leases". IFRS 16 is a new accounting standard.
Revenue was EUR3.35 billion, rising 3.7% from the year before.
In June 2019, shareholders approved a dividend of 0.57 EUR cents per share plus a special EUR2.00 per share dividend which was paid July 30, two days after the end of its financial year. This compares to a 0.54 cents per share dividend paid in July 2018.
Chief Executive Zoran Bogdanovic said: "We are pleased with this solid first half given the challenging combination of tough comparators and unseasonably cold and wet weather. We grew revenue and volume across all three segments of our business and delivered further growth in comparable margins.
"Revenue growth management and innovation continue to deliver results, with innovation driving 4.5 [percentage points] of volume growth in the first six months. We are driving growth in some of our most important categories including Sparkling, Water and Energy and we are progressing with preparations to launch Costa Coffee in 10 of our markets in 2020," he continued.
"We made good progress in the period on our packaging initiatives with three of our water brands now being bottled in 100% recycled plastic. Looking forward, we expect to deliver FX-neutral revenue growth within the range of [5% to 6%], with another year of margin expansion."
In the second half, the company is forecasting improved revenue growth over the first half, particularly in emerging markets. This is to be "driven by faster volume growth in all segments".
Shares in Coca-Cola HBC were down 2.1% at 2,770.00 pence in London on Thursday.
Coca-Cola HBC (CCH)