CCHBC lifted by Russia, Romania
Coca-Cola Hellenic Bottling Company to post steady third quarter
profit increases, despite problems elsewhere in eastern Europe.
The Greece-based bottling firm announced a ˆ36 million sales increase to ˆ386 million in its emerging markets sector for the third quarter of 2004, and an almost ˆ100 million increase for whole nine months, compared to the same periods last year.
Sales increases in this sector, which includes the Balkan states, Russia, Romania, Ukraine and Nigeria, have outstripped rises in CCHBC's established and developing market sectors.
And the company has singled out Russia and Romania as the "key drivers" of its 6 per cent and 12 per cent operating profit increase over the third quarter and nine-month periods respectively.
CCHBC said extended product ranges were instrumental to growth and "some of the most important initiatives were new water flavours in Russia under the Bonaqua umbrella and flavour extensions of Cappy [juice] in Romania".
A report by market analysts Euromonitor said that the range of flavours and healthier image of juice and bottled water would drive the growth of Russian soft drinks market in the next few years, as "consumers slowly turn away from the over-sweetened and artificially-flavoured carbonated drinks".
Soft drink consumption doubled in Romania between 1998 and 2003, with volume rising by 85 per cent to 1.7 billion litres. Health conscious consumers are again playing a role with bottled water highlighted by Euromonitor as the most dynamic growth area. Soft drinks' market value is expected to rise by 24 per cent up to 2008.
CCHBC has been more reliant on these emerging markets in 2004 after its developing markets business, covering the rest of central and eastern Europe, recorded a ˆ1 million drop in third quarter operating profits and only a ˆ4 million increase over the nine months.
High raw material prices across the region and undercutting by cheaper, local brands in Hungary and the Baltic states were the problems, according to CCHBC. The exception was Poland, which especially benefited from growth of single serving packs and an extension to the company's Fanta Grape drink.
CCHBC's nine-month net profit for 2004 stands at ˆ178 million and is in-line with company expectations for the year, although it is expecting fourth quarter profits to be marred by extra restructuring costs of between ˆ55 and ˆ65 million.
