Coca-Cola Amatil withdraws earnings guidance over virus uncertainty

Coca-Cola Amatil will no longer provide earnings guidance due to the uncertainty of the impact and duration of the COVID-19 pandemic.

The beverage bottler forecast mid-single digit earnings per share growth in 2020 and in the medium term at its 2019 full year results on February 20, however, government measures to combat the virus is already impacting the business.

“We have seen a significant escalation of measures taken by governments in each of our markets in an effort to slow the rate of COVID-19 infection. These are having and will have a myriad of consequences for our customers and our businesses,” the company said in a statement to the ASX on Tuesday.

“Given the significant uncertainty in relation to the duration and impact of the COVID-19 pandemic, we no longer feel it is appropriate to continue to provide earnings guidance.”

The company has reported strong growth in the grocery channel in Australia and New Zealand as consumers stock up on items. In Australia, this growth has been offset by declines in On-The-Go (OTG) channels which have been soft, following the bushfires in January.

“We would expect OTG weakness to accelerate given consumers’ likely preference for staying at home as well as the widespread cancellation of major sporting, entertainment and cultural events,” Amatil said.

Group managing director Alison Watkins said Amatil’s overriding priority is the safety and wellbeing of its people.

“We will continue to support our customers and our local communities, and at this stage we expect we can continue to operate our business and avoid significant supply chain disruption, while maintaining our workforce during this challenging time,” she said

Amatil also reported a reduction in foot traffic in Indonesia as people opt to stay home, with Bali volumes also impacted by the severe decline in tourism.

The company is due to hold its annual general meeting on May 26 and is planning to offer online access for shareholders.

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