Coca-Cola Amatil has suffered a profit slump and will shut down its South Australian manufacturing as the soft drink maker continues reshaping to face a changing and increasingly competitive Australian marketplace.
The company made the shock announcement that it will close its Thebarton plant in central Adelaide in 2019, costing around 180 jobs, as it booked a 37.4 per cent drop in annual net profit for 2016 to $246.1 million.
Group managing director Alison Watkins said the company had to invest in growing in new market segments more consumers turn away from full sugar soft drinks.
"We want to invest in our supply chain so that we can play more strongly in the categories that are growing such as dairy, juice and the premium glass end of the beverages spectrum," she told AAP.
The slide in headline profit was due to a $171.8 million after tax writedown on its SPC fruit processing and canning business.
SPC continues to face tough competition from imported products but Ms Watkins said CCA remains committed to securing SPC's future.
"We see a strong future for SPC as it continues to expand its range of products and explore new markets," she said.
CCA lifted underlying net profit 6.2 per cent to $417.9 million, while underlying earnings for Coca-Cola's Australian beverages business, which accounts for around two thirds of group earnings, were down 1.8 per cent to $455.3 million.
Ms Watkins said the company faced tough competition in the Australian market in the water and sports drink categories.
CCA's Indonesia and Papua New Guinea business recorded a 42.9 per cent lift in underlying earnings.
Ms Watkins said Indonesia's growing young middle class presented an important opportunity for CCA.
"We know from experience with other countries around the world as consumers become more wealthy they consume more of the ready-to-drink kind of beverages, so the opportunities for growth are very exciting," she said.
The New Zealand and Fiji business posted a 6.9 per cent lift in underlying earnings to $105.6 million.
CCA said it will shut its Thebarton plant because it was impractical and expensive to further develop the site.
The company will save $20 million a year from 2020 from the closure.
It will expand production in Queensland and Western Australia, with $90 million to be spent on new glass production, dairy and juice production lines at its Richlands plant in Queensland.
CCA also announced an on-market share buy-back of up to $350 million to begin from late March this year.
Its long standing chairman David Gonski will leave in May, to be succeeded by non-executive director Ilana Atlas.
Shares in Coca-Cola Amatil were up 57 cents, or 5.75 per cent, to $10.48 at 1448 AEDT.
COCA-COLA AMATIL TO REMODEL AUSTRALIAN SUPPLY CHAIN
*Net profit fell 37.4pct to $246.1m
*Revenue up 1.3pct to $5.25b
*Final dividend, 75pct franked, of 25 cents a share, up from 23.5
