November 8, 2018 / 7:48 AM / a year ago

Coca-Cola HBC shares fizz after strong quarter

LONDON (Reuters) - Soft drink bottler Coca-Cola HBC (CCH.L) reported higher quarterly revenue, driven by demand in expanding markets such as Poland, Russia and Nigeria, and stood by its full-year outlook, sending its shares up 5 percent.

FILE PHOTO: Coca-Cola crates are pictured in Abuja, Nigeria September 19, 2018. REUTERS/Afolabi Sotunde/File Photo

The bottler of Coca-Cola Co (KO.N) drinks, whose shares had fallen about 19 percent since July, said third-quarter revenue rose 2.6 percent to 1.87 billion euros (1.62 billion pounds). Analysts on average were expecting 1.86 billion euros, according to a consensus forecast supplied by the company.

Excluding the impact of currency fluctuations, revenue rose 4.5 percent, with the bulk of the growth coming from volume gains. Higher prices contributed only 0.3 percent to the increase.

The volume was higher than some analysts expected and the pricing weaker. The company blamed promotions due to increased competitive pressures and higher sales in Europe of bottled water, which is cheaper than other drinks.

Still, the company said pricing should improve in the current fourth quarter.

“October trading has been strong, and we look to the full year confident that 2018 will be another year of good growth in both revenue and margins,” Chief Executive Zoran Bogdanovic said in a statement.

The company's shares were up 5.8 percent in London at 0925 GMT, the biggest gainers on the FTSE 100 index .FTSE.

Jefferies analysts said the overall performance was likely to spark a modest relief rally in the shares, given their discount to the sector and recent weak performance.

When asked about mergers and acquisitions, Bogdanovic said the company was actively looking, particularly at waters and juices, but he declined to comment specifically on an African bottling asset that Coca-Cola has been looking to sell.

The company uses concentrates and syrups from Coca-Cola Co to manufacture and distribute bottled drinks, mostly in Europe. Coca-Cola has a stake of around 23 percent in the bottling company, according to Refinitiv Eikon data. ($1 = 0.8759 euros)

Reporting by Martinne Geller; Editing by Mark Potter/Keith Weir

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