Coca Cola Hellenic Net Profit In Line As Cost Cuts Offset Tax

By Nick Skrekas

Of DOW JONES NEWSWIRES

ATHENS -(Dow Jones)- Greece's Coca-Cola Hellenic Bottling SA (CCH), the world's second largest bottler of Coca-Cola products, met forecasts Thursday with a second-quarter net profit of EUR171.2 million as ongoing cost cutting efforts and foreign exchange movements more than offset higher taxes.

In a statement, the company said "our group-wide focus on strong cash flow generation continues to yield results, while we are increasing our investment in marketing in countries where signs of recovery are more evident. Whilst remaining vigilant in the highly challenging Balkan markets, we remain on target to deliver our three-year cash flow guidance."

The net profit for the three-month period ending June 30 was weighed down by EUR21.2 million in tax provisions levied by Greece to help reduce its budget deficit.

However, sales edged higher assisted by moderate price increases of 2% from EUR1.89 billion, while unit case sales weakened 2% to 577.9 million from 592.6 million cases a year earlier.

The figures were broadly in line with analyst expectations.

"The broad geographic spread of our business enabled us to deliver a robust operating performance in the first half of the year, with the effects of increasingly challenging conditions in specific key countries being offset by improving trading performances in other markets, particularly in Eastern Europe." said Managing Director Doros Constantinou in a statement.

CCH--which has operations in 28 countries, mainly in eastern Europe--is showing signs of a rebound in operations in emerging markets, and an improving product mix has helped results. Foreign currency movements also contributed positively to results compared with last year where it took losses.

Coca-Cola Hellenic shares closed Wednesday down 1%, at EUR17.74. In recent months, the stock has underperfomed the broader Athens index by 5%. The stock trades at a price-to-earnings ratio of 13.4 times 2011 earnings which is a discount to the European bottling sector which trades at about 16 times earnings.

Company Web Site: www.coca-colahellenic.com

-By Nick Skrekas, Dow Jones Newswires; +30 210 2830 685; nick.skrekas@trk.forthnet.gr