Athens, April 29 - Coca-Cola Hellenic (CCH), the world's No.2 bottler of Coke drinks, is seen posting a 64.7 percent drop in first-quarter profit as the recession hit demand for soft drinks and weakened currencies in key markets.
The average forecast in a Reuters poll of analysts is for net profit of 9.9 million euros ($12.9 million), down from 28.10 million in the same period in 2008. Estimates ranged widely, from a loss of 8 million euros to profit of 20.2 million.
The global downturn has seen consumers cut spending on soft drinks, hurting the bottler's lucrative retail sales business. The bottler has not provided guidance for 2009, citing the global uncertainty but has said softer input costs and further cost cutting efforts should help offset adverse economic conditions. CCH is targeting savings of about 120 million euros this year through a restructuring of its operations.
Currency devaluations against the euro in a number of CCH's key markets, such as Russia and Romania, is also seen weighing on the bottler's bottom line.
CCH , which is 23.3 percent-owned by Coca Cola , bottles Coke-branded products in 27 countries across Europe and in Nigeria. Volume in the first quarter is seen flat at 429.3 million unit cases.
"The compounding effect of weak volume and foreign exchange is expected to be a hard blow (for) profitability despite cost containment initiatives and a milder input costs environment", Athens-based Alpha Finance brokerage said in a preview note.
Analysts also said there were concerns over the impact of the global crisis on tourism, which is crucial for the summer season, CCH's strongest based on sales.
The stock trades at 11 times estimated 2009 earnings, compared with a multiple of 12.7 for Coca Cola Enterprises , the world's largest bottler of Coke drinks, and 13.8 for rival Pepsi Bottling .
Analysts attribute the discount to CCH's higher exposure to foreign exchange risks and emerging markets than its peers.
CCH shares have gained 12.5 percent since the start of the year, compared with a 7.8 percent rise for the Athens bourse's general index.
Following is a breakdown of analysts' forecasts:
of analysts' forecasts:
Q109
Net EBIT Sales Volume
Average 9.91 40.11 1327.87 429.29
Median 12.50 39.70 1331.80 430.10
Highest 20.20 56.10 1430.00 438.30
Lowest -8.00 18.70 1251.90 419.70
Q1 2008 28.10 66.50 1372.70 428.80
Change % -64.73 -39.68 -3.27 0.11
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