Coca-Cola HBC flags one-time $195 million hit from Russian operations
2022.08.11 10:14
FILE PHOTO: Coca-Cola bottles are seen on sale in central St. Petersburg, August 6, 2014. Coca-Cola Co confirmed on Wednesday it had taken advertisements off four Russian television channels, saying a fall in second-quarter sales had prompted a rethink of
(Reuters) -Coca-Cola HBC AG said on Thursday it incurred a one-time hit of 190 million euros ($195.36 million) in the first half due to costs related to its Russian business after it stopped sale of Coca-Cola drinks in the country following the Ukraine war.
HBC also reinstated its forecast, expecting comparable operating profit for 2022 to be between 740 million euros and 820 million euros, dented by a smaller presence in Russia and inflation woes. That is lower than 831 million euros it reported in 2021.
The soft drinks bottler, which once counted Russia as one of its biggest markets, said it expects to sustain financial charges of about 82 million euros in the second-half as it depleted all its stocks and would no longer make or sell Coca-Cola or other brands of the Coca-Cola Company (NYSE:KO) in Russia.
HBC is one of Coca-Cola’s many bottlers worldwide and holds local Coca-Cola franchises to bottle and sell drinks produced by the U.S. beverage giant. Coca-Cola holds more than 20% stake in HBC.
The London-listed firm also reported a 34% fall in net profit at about 153 million euros for the six months ending July 1, hit by the charges, and said it continues to face ongoing inflation and now assumes cost of goods sold (COGS) per case to increase by mid-teens in 2022.
Switzerland-headquartered HBC’s diverse portfolio ranges from alcoholic beverages such as The Macallan and Jack Daniel’s to carbonated drinks Sprite and Monster Energy to eateries such as Bambi biscuits and wafers.
($1 = 0.9726 euros)
