Coca-Cola Amatil

By Dan Stratful

Wednesday 29th February 2012

Coca-Cola Amatil (ASX: CCL) has growth potential with its exposure to the Indonesian economy, but brokers have recently downgraded the stock from BUY to NEUTRAL as the company was affected by cooler weather in its latest full year result.

CCL’s full year result for the year ending 31 December 2011 (FY11) showed steady growth with a net profit (before significant items) of $532 million, up 5% on FY10. The Indonesian and PNG businesses saw steady growth with their earnings increasing over 5 times since 2006, showing that investments previously made in this region are paying off.

The Australian business delivered an increase in EBIT of 2.4% in FY11 to $607 million on trading revenue growth of 2% and earnings in the first half of FY11 were impacted by lower volumes due to the Queensland floods and cyclone Yasi.

The New Zealand business delivered local currency earnings growth of 3% in FY11, not a bad result in a soft consumer spending environment, and the Rugby World Cup held in September & October 2011, provided a lift in volumes.

CCL is a major bottler of non-alcoholic and ready-to-drink beverages in the Asia-Pacific region, and one of the world’s top five Coca-Cola bottlers.

In FY12, CCL intends to up-weight its investment in Indonesia and Papua New Guinea as the growth outlook for both businesses continues to be favourable.

Status: HOLD

CCL’s shares today traded at $12

For portfolio, sharemarket and fixed income enquires contact:
Dan Stratful at Investment Research Group (IRG)
Authorised Financial Adviser (AFA)
0800 437 8489, 09 304 0232, dan.stratful@irg.co.nz
**A disclosure statement is available, on request and free of charge.

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