Coca-Cola Amatil to Book Impairment Charge on Indonesia Unit Amid Pandemic
By Mike Cherney
SYDNEY--Australian bottler Coca-Cola Amatil Ltd. said Thursday
that it would recognize an impairment charge on its Indonesian unit
as the coronavirus pandemic disrupts business there, but that
trading had improved in other key markets.
Coca-Cola Amatil said it would recognize a non-cash, post-tax
impairment charge in a range of 160 million Australian dollars
(US$114 million) to A$190 million at its first-half result,
expected in August, and that it would mostly relate to its
The company added that it is currently assessing the carrying
value of each of its businesses.
"These expected impairments are non-cash accounting adjustments
and we remain very confident about the long-term prospects for our
Indonesian business," said Managing Director Alison Watkins.
In June, Indonesia volumes declined by 23%, significantly more
than other regions, as coronavirus infection rates remain high. In
Australia, volumes were down just 3% in June, and volumes were up
4% in New Zealand, where a significant easing of restrictions has
Overall, group volumes declined by 9% in June and by 23% in the
second quarter, Coca-Cola Amatil said. It also warned that margins
have been adversely impacted, with consumers tending more toward
the grocery channel and away from higher-margin on-the-go
"It is encouraging to see the improvement in our volumes as the
pandemic restrictions were lifted across a number of our markets,"
Ms. Watkins said. "We nevertheless remain cautious, given the
reinstatement of lockdown measures from July in Melbourne and the
rising Covid-19 infection rate in Indonesia."
Write to Mike Cherney at firstname.lastname@example.org
(END) Dow Jones Newswires
July 22, 2020 19:26 ET (23:26 GMT)
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