By Mike Cherney
SYDNEY--Australian bottler Coca-Cola Amatil Ltd. said Friday that it is withdrawing dividend guidance and that volumes fell in the first two weeks of April due to coronavirus lockdowns.
Amatil is temporarily withdrawing its dividend payout ratio guidance to give it more flexibility to address future economic challenges arising from the lockdowns. Amatil will decide on its 2020 dividend at its first-half result later in the year, it said.
The withdrawal comes as overall volumes fell 30% in the first two weeks of April, the start of the company's second quarter and typically a key trading period in the lead up to Easter and Ramadan. Indonesia volumes fell 50% and Australia volumes fell 15%, as consumers stayed home due to lockdowns.
In the first quarter, volume grew by a low single-digit percentage, Amatil said. But earnings before interest and tax fell by the mid teens. In March, the start of the coronavirus impact, Amatil said volume was up in the mid single digits as consumers stockpiled supplies, but earnings fell by the low single digits.
Earlier this month, Amatil completed a bond offering for 200.0 million Australian dollars (US$126.5 million) to help it navigate the uncertain economic outlook. It is also targeting A$140 million in cost savings and a A$100 million reduction in capital expenditures.
"The Covid-19 impacts are continuing to evolve with the situation fluid across all of our markets," Managing Director Alison Watkins said. "We are experiencing large volatility in volumes across markets and channels making it premature to draw any conclusions about the trading impact of the pandemic at this stage. We will have a clearer view at our annual general meeting in May."
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