Light at End of Tunnel From Strong Aussie: Coca-Cola Amatil
There is some "light at the end of the tunnel" for Australian food manufacturers that have suffered under the weight of a strong Australian dollar, Coca-Cola Amatil's group managing director, Terry Davis, said on Tuesday.
Earlier in the day, Australia's biggest soft-drinks bottler said its full-year net profit fell 22 percent to A$459.9 million ($474 million), with the firm taking A$146 million worth of write-downs on its packaged food business, which has been hit by a strong currency and falling prices for fresh fruit.
The Australian dollar, trading at around 1.03 to the U.S. dollar, has risen about 6 percent from lows hit in June last year.
"There's no doubt that it has been a tough time for Australian food manufacturers. You've got an increase in private (food) labels and a lot of that's being imported and also you're finding that your export markets are less profitable so you get hit on both sides," Davis told CNBC Asia's "Cash Flow."
"But there is some structural adjustment going on and the government is starting to recognize this as well and so are the big supermarkets by trying to support more Australian manufacturers. And I think there is a bit of light at the end of the tunnel there after a tough period," he said.
Davis said that Coca-Cola Amatil was basing its forecasts for this year for the Aussie dollar around parity against the U.S. currency.
"(We see it) somewhere between $1 and $1.05 and it seems to have settled down in that area. A lot depends on China and what the Reserve Bank (of Australia) does with interest rates," he said, referring to factors that could drive the outlook for the Australian currency.
Australia's central bank saw the room to cut interest rates further if needed, but kept them steady in February because parts of the economy were responding to the impact of earlier rate cuts, minutes released on Tuesday from the central bank's February 5 meeting showed.
The Reserve Bank of Australia has lowered interest rates by 175 basis points since late 2011.