Athens, June 13 - Greece's Coca-Cola Hellenic cut its 2008 profit guidance on Friday as poor weather, rising costs and strikes hurt sales in the early part of the year, knocking as much as a fifth off its share price.
The world's second-largest bottler of Coke drinks said May revenue, at the start of its most profitable season, grew slowly as soaring fuel and food costs in its profitable central and east European markets hurt customer sentiment. Coca-Cola Hellenic lowered its forecast for earnings per share (EPS) for 2008 to 1.37-1.40 euros a share, or EPS growth of 5-8 percent, down from previous guidance of 1.46-1.49 euros a share, or EPS growth of 12-15 percent.
"(These) factors are expected to impact adversely (growth in) our operating profit result, particularly in the first half of the year, which we expect to be down in the mid-to-high single digits (percentage) versus prior year," it said in a statement.
Volume growth estimates were also cut to 6 percent from 7 percent for the full year, while its earnings before interest and tax (EBIT) are seen growing 5-7 percent from 11-13 percent previously, the statement said.
"The new targets stand below our forecasts, that were close to the top-end of the previous guidance," Proton Research, who have an underperform rating on the stock, said in a note.
Coca-Cola Hellenic shares dived after the announcement, dropping a record 19.3 percent to 21.70 euros a share in early trade on the Athens Stock Exchange.
"Foreign institutional investors are selling their positions in the stock as they are expecting a drop in profit," Takis Zamanis, a trader at Beta Securities.
Weather conditions in key central European markets as well as Russia and Ukraine were worse in May compared to the year earlier, hurting sales, it said.
A worsening economic climate in markets such as Italy, Ukraine and Romania, which hurt sales, as well as continued high oil prices hitting the company's cost base, contributed to the downward revision of its targets, the company said.
In Greece, a 12-day general transportation strike in May also exacerbated problems as the company was unable to fill customer orders for at least three to four weeks ahead of its high selling season, it said.
"We are already initiating specific action plans to meet these challenges, and I believe that the steps we are taking will enable us to deliver our updated full-year guidance," company CEO Doros Constantinou said in a statement.
Coca-Cola Hellenic bottles Coke-branded products in 27 countries throughout Europe and Nigeria, with more than half its sales coming from its emerging markets in eastern Europe.
The stock trades about 18 times its estimated 2008 earnings, compared with a multiple of 15 for Coca Cola Enterprises, the world's largest bottler of Coke drinks, and about 15 for Australian-based Coca-Cola Amatil.
Before today, the shares had lost about 9 percent since the start of the year, outperforming a 28 percent slide for the Athens general index.