Coca Cola repays subsidies after better-than-expected full-year profit
The Australian distributor and bottler for drinks giant Coca Cola has announced it will repay the wage subsidies it claimed from the New Zealand government following a better-than-expected full year result.
ASX-listed Coca Cola Amatil told investors on Friday morning it would send back the $NZ7.2 million ($6.68 million) it received as part of New Zealand’s subsidy scheme after revealing its earnings for the 2020 calendar year would ring in at $550.7 million.
While this marks a 13.9 per cent fall on the prior year, the figure comes in higher than market analysts were expecting, with consensus forecasts of $504.1 million. Net profit after tax is expected to be $340.3 million.
Chief executive Alison Watkins said the positive result was due to strong Christmas trading across Australia and New Zealand, especially from within Australian supermarkets. However, she warned COVID-19 uncertainty would still prevail into the new year due to ongoing restrictions.
“Whilst we are encouraged by recent trading in Australia and particularly in New Zealand, month to month volatility remains,” she said.
“This is particularly the case in Australia, where On-the-Go (OTG) trading can vary considerably by state depending on the prevailing COVID-19 restrictions and related sentiment at any given point in time.”
Volumes across the group fell 5.4 per cent in the September quarter, a significant improvement on the June quarter where volumes tumbled 22.8 per cent due to the virus. Total volumes for the year are down 8.4 per cent, with revenues at $4.7 billion, down 6.1 per cent.
Coca Cola Amatil’s decision to repay its New Zealand subsidy will remove any benefit of stimulus from the business’ full-year results, which it will officially announce on February 18.
It follows similar calls from a number of other Australian businesses, including Super Retail Group and Toyota, which both repaid millions in JobKeeper received over the course of the pandemic.
“The performance of our New Zealand business has been outstanding and reaffirms its reputation as one of the best performing bottlers in the Coca-Cola System globally,” Ms Watkins said.
“As a result of the strength of our performance in this market, we believe it is appropriate to repay the New Zealand Government stimulus that we received during the peak of the pandemic and take this opportunity to thank the New Zealand Government for its support during a period of extreme uncertainty.”
The local bottler did not receive JobKeeper for its main operations but claimed less than one million of the stimulus for various subsidiaries, including craft brewing division Feral.
Coca Cola Amatil is currently in the midst of progressing through a takeover offer from Coke’s European arm, valued at $9.3 billion. The business noted the scheme was still underway, with a proposal expected to be sent to shareholders by early March.
Dominic Powell writes about the retail industry for the Sydney Morning Herald and The Age.
Most Viewed in Business
Source: Thanks smh.com