CCHBC halves losses but news of departure sends share sliding

Coca-Cola Hellenic Bottling Company (CCHBC) beat market expectations by halving losses in its traditionally weak first quarter, but shares fell on news the well-respected CFO would leave the firm. The world’s third-largest bottler of Coca-Cola products by volume said yesterday losses came in at 12 million euros from 26.3 million a year earlier, while earnings before interest, tax, depreciation and amortization (EBITDA) rose 17 percent to 112 million euros ($132.2 million). In a separate announcement, CCHBC said Chief Financial Officer Bill Douglas would be leaving in July to join Coca-Cola Enterprises, the largest bottler of the Coca-Cola system, and would be replaced by Nik Jhangiani, who is currently Group Controller in CCHBC. «The share is moving purely on the news of Bill Douglas’s departure, as he was well respected, especially abroad. This causes some nervousness in the share despite the forecast beating results,» said head analyst Costas Theodorou at National Securities. CCHBC’s share lost 2.05 percent to 20.08 euros in Athens. CCHBC said sales were 11 percent up to 885.1 million euros, with sales volumes up by 11 percent to 299.2 million unit cases. Fourteen analysts polled by Reuters had forecast on average a loss of 18.6 million euros, EBITDA at 108 million euros and sales coming in at 860 million euros. Water sales keep bubbling CCHBC added the results reflected solid volume growth across all segments and a series of new products and pricing schemes, as well as mild winter weather and recent bottled-water acquisitions in central and eastern Europe. «We will be keeping our eyes open for new opportunities in the water market in countries in our portfolio where we are not yet present,» Managing Director Doros Constantinou told Reuters. He added that the share of CCHBC’s water business in the overall sales volume had risen to over 20 percent from 13 percent last year. «The expansion in the water business is very important and CCHBC has shown it aims to be a strong player in a market with significant growth margins,» Theodorou said. Constantinou added in a statement that first-quarter figures inspired confidence for the full year and the firm saw 2004 performance meeting the upper half of previously communicated guidance of net profit at between 140 and 150 million euros, with EBITDA rising by between 10 and 12 percent. The company added that its directors would propose a dividend of 0.20 euros per share for the full-year 2003, marginally up from the previous year. Parent Coca-Cola holds a 24 percent stake in CCHBC, with around 30 percent held by holding company Kart-Tess Group, which is legally bound to retain 28 percent. Contrary to market speculation, Kart-Tess does not intend to sell the remaining 2 percent as they are very pleased with the course of the company and the share price, management told Reuters.

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