Melbourne, May 3 - Australian soft drinks company Coca-Cola Amatil Ltd. said on Wednesday it expected net profit growth of between 1.4 percent and 4.5 percent in 2006, but warned cost pressures would be at the upper end of its guidance.
The company's shares fell more than three percent on the market update, which was delivered to its annual general meeting.
C-C Amatil said it expected a net profit before one-off items of between A$325 million ($250 million) and A$335 million this year, compared to A$320.5 million in 2005.
The mid-point of A$330 million was slightly below analyst forecasts that centre on A$333.1 million, according to Reuters Estimates.
The company said the cost of goods sold for its beverages arm was expected to rise by 7 percent this year, while costs for its food business were likely to rise by 8 percent.
In February, C-C Amatil had said the cost of goods sold was expected to increase by 6 percent to 7 percent for beverages and by 6 percent to 8 percent in food.
Pressures on packing costs have come from increasing prices for PET containers and aluminium, and sugar prices have also risen.
"The major priority again for the balance of this year will be achieving full cost recovery of commodity-driven cost of goods increases," Chief Executive Terry Davis told the meeting.
"The trading environment in Australia remains highly price competitive, particularly the supermarket channel."
C-C Amatil forecast group volume growth in 2006 of between 3 percent and 5 percent, while the Australian business was expected to achieve volume growth of between 5 percent and 6 percent in the first half.
Volumes in Australia have been boosted by the launch of Coca-Cola Zero in January, part of a strategy to target consumer demand for healthier products. The company said the product had also performed above expectations in New Zealand.
C-C Amatil said South Korea remained on track to return to profitability in the first half of 2006, excluding the costs of an early retirement plan.
But it said consumer spending had materially declined in Indonesia since early 2005 due to the removal of a fuel subsidy and rising interest rates.
"The Indonesian business has experienced a slow start to the year," C-C Amatil said.
It said its SPC Ardmona packaged fruits business had enjoyed a solid start to 2006.
Shares in C-C Amatil, 32 percent owned by Atlanta-based Coca-Cola Co., were down 3.2 percent at A$7.07 in late trade in a wider market down 0.1 percent. ($1=A$1.30)