UPDATE 2-CCH Q1 profit beats expectations, trends positive

* Q1 comparable net at 25.4 mln euros versus 7 mln last year

* Q1 sales volume fell 2 percent y/y to 431 mln unit cases

* Says remains cautious, Q1 less important, conditions tough

* Still sees volume recovering in the second half of year

* Shares up 1.7 percent

(Adds more details, managing director comments)

By Angeliki Koutantou

ATHENS, April 29 (BestGrowthStock) – Greek Coke bottler (HLBr.AT: )
smashed expectations by posting a more than threefold increase
in first-quarter net profit, benefiting from bold cost cutting
measures taken last year to deal with the global downturn.

Coca-Cola Hellenic, the world’s second-largest bottler of
Coca-Cola (KO.N: ), reported on Thursday comparable net profit of
25.4 million euros ($33.83 million), up from 7 million euros in
the same period last year, versus an average forecast of 14
million in a Reuters poll.

Economic slowdown around the world has led consumers to
slash spending on soft drinks and caused currency devaluations
since the last quarter of 2008, hurting CCH’s business.

But the bottler weathered the crisis and improved
first-quarter profit (Read more your timing to make a profit.)ability thanks to cost savings of about 140
million euros it undertook last year. These initiatives would
continue to benefit operating profit by about 30 million euros a
year from 2010 onwards, the company said.
“We improved profitability in the quarter, primarily
reflecting the benefit of earlier cost cutting programmes and
the favourable effect of currency movements,” CCH’s managing
director Doros Constantinou said in a statement.

Favourable currency movements in Russia, Poland, Hungary and
Romania also boosted first-quarter results.

CCH shares rose 1.7 percent to 19.84 euros at 0807 GMT in
Athens.

“The company proves it responds well to the current
difficult economic environment,” Iakovos Kourtessis, an analyst
at National P&K Securities said. “The first quarter has a small
contribution but it shows that the trend will be positive for
the full year.”

SLOW RECOVERY

Constantinou said in a phone interview with Reuters that
there were early signs of stabilisation in key countries such as
Russia, although conditions remained tough, and he was still
expecting profit to improve in the second half of the year.

“We expect the volume recovery to lag the growth of GDP,
meaning that we see some improvement in the economies of some
countries, slowly, and we expect that it will benefit our
business with a time lag,” he said.

CCH buys syrup concentrate from Coca-Cola Co and bottles and
distributes drinks including Coca-Cola, Sprite and Fanta in 27
countries in Europe and also in Nigeria.

Sales volume fell 2 percent to 431 million unit cases, at a
much slower rate than the 8 percent decline in the fourth
quarter last year, with Nigeria, Switzerland and Austria
performing well.

Constantinou told Reuters Greece’s debt crisis would have an
impact on the bottler but the firm could not still evaluate its
effects since the government’s deficit-cutting measures were not
fully implemented yet.

Domestic operations account for about 8 percent of the
bottler’s total sales volume and about twice operating profit.

CCH kept its target for capital expenditure of about 1.4
billion euros and free cash flow of 1.5 billion euros in the
2010-2012 period.

The stock trades at 15.5 times estimated 2010 earnings,
versus a multiple of 16 for Coca-Cola Enterprises (CCE.N: ), the
world’s largest bottler of Coke drinks, and 15.4 for rival Pepsi
Bottling (PBG.N: ), according to Thomson Reuters I/B/E/S.

Stock Market Investing

($1=.7508 euros)
(Editing by Jon Loades-Carter)

UPDATE 2-CCH Q1 profit beats expectations, trends positive