Coca-Cola HBC AG said on Thursday it took a one-time hit of 190 million euros ($195.4 million) in the first half from costs related to its Russian business after it stopped selling Coke and other Coca-Cola Co. products in the country.
The soft drinks bottler also reinstated its forecast for the year, expecting annual comparable operating profit between 740 million and 820 million euros, above market expectations.
Its shares rose 6 percent to 2,100 pence.
HBC is one of Coca-Cola’s many bottlers worldwide and holds local Coca-Cola franchises to bottle and sell drinks produced by the U.S. beverage giant. Coca-Cola holds a more than 20 percent stake in HBC.
Atlanta-based Coca-Cola Co. in March joined an exodus of companies from Russia in the wake of the Ukraine invasion, which Moscow terms a “special military operation.”
HBC said it has depleted its stock and stopped producing and selling Coca-Cola products in Russia, once its largest market, and would now have a smaller presence there.
Chief Executive Officer Zoran Bogdanovic told Reuters that local brands like Dobry, Rich, and Moya Semya remain profitable and are self-sufficient as it does not partner with Coca-Cola Co. for any of its sales in the Russian market.
HBC’s net sales revenue grew nearly 30 percent for the six months to July 1, beating a company-compiled consensus of analysts estimate of 3.95 billion euros, as emerging markets remained strong. Comparable operating profit also beat expectations, but net profit came in below estimates due to the charge in the first half.
It expects financial charges of about 82 million euros in the second-half related to its Russian operations.
Bogdanovic said the company has had to lay off employees in Russia as it downsized its business there.
Switzerland-headquartered HBC’s diverse portfolio ranges from alcoholic beverages such as The Macallan and Jack Daniel’s to carbonated drinks Sprite and Monster Energy to Bambi biscuits and wafers.
($1 = 0.9726 euros)
