Restructuring costs see Irish Coca-Cola profits fall 78%

RESTRUCTURING costs last year totalling €11.6m contributed to pre-tax profits at the main Irish bottling arm of Coca-Cola decreasing by 78% to €953,000.

Last year, Coca-Cola HBC Ireland Ltd (CCHBCIL) Ltd made 130 workers redundant following it decision to outsource the jobs in four distribution centres across the country.

The company agreed the revised redundancy deal in October of last year following a nine-week dispute and the returns show that CCHBCIL paid a dividend of €20 million to its parent the following month.

A survey last year found that Coca-Cola was the biggest selling brand in Irish shopping baskets, though revenues at CCHBCIL fell 13% from €244.6m to €212.8m to the end of December last.

Operating profits before reorganisation costs increased eight-fold from €1.54m to €13.6m after the company reduced costs by €43m, or 18%, to €199m.

However, the €11.6m spent on re-organisation costs contributed to the company’s pre-tax profits reducing by 78% from €4.4m to €953,000.

Ninety-four per cent, or €201 million of the company’s sales in 2009 came from its soft drinks division, that includes Coca-Cola, Diet Coke, Sprite, Fanta, Powerade, Deep Riverrock, Vittel, Fruice and BPM Energy Drinks.

Profits were also impacted by finance expenses of €449,000 last year compared to €794,000 in 2008.

The numbers employed by the company — which distributes and sells all Coke brands in Ireland — reduced by 71 from 623 to 552, with staff costs down €2.2m from €30.3m to €28m.

The company received an interim dividend of €12m from a subsidiary on August 27 this year and the company itself paid a dividend of €12m to its own parent on the same date.

The accounts confirm that during 2010 the group sold the assets of the wholesale business of buying and selling bottled beer and soft drinks — other than the business of buying and selling drinks in the Coca-Cola portfolio — and the distribution of kegs of draught on behalf of Diageo Ireland and Bulmers Ltd.

Coca-Cola said that the group “continues to expand the reach of established brands to consumers through the launch of new brand extensions and continued package innovation”.

Coca-Cola first established a base in Ireland in 1952. Globally Coca-Cola employs 92,800 people with the company’s products sold in over 200 countries.