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Optus Coke -

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Optus Coke

Sue Lannin reported this story on Thursday, August 13, 2009 12:22:00

ELEANOR HALL: We've just been hearing about Telstra's big profit increases. Its rival Optus has
also posted some good news. Its profits rose by 13 per cent. And some other big companies are also
reporting strong results.

Finance reporter Sue Lannin:

SUE LANNIN: There may be a global recession but Australia's biggest snacks and soft drinks maker
has proved resilient. Coca-Cola Amatil posted a 10 per cent rise in profit for the first half of
the year to almost $190 million - a record result. Managing director Terry Davis says the increase
in earnings came despite the tough times.

TERRY DAVIS: We've delivered another record profit result for this year. It came from great
performances by Australia, Indonesia and Papua New Guinea and a much improved result from food and

Even the New Zealand and Fiji business given, had modest growth in local currency earnings which
was a commendable result given the very challenging economic conditions in New Zealand.

SUE LANNIN: The hot summer weather in Australia also helped.

TERRY DAVIS: The Australian beverage business delivered a record result. It would be very hard for
the group to have a record result without Australia having it.

We certainly saw consumer demand higher for high value single serve products in the first quarter
given the favourable summer weather.

SUE LANNIN: Supermarket sales have remained strong during the downturn as people turn to cheaper
brands. But Terry Davis says consumers still prefer their favourites.

TERRY DAVIS: Consumers appear to be eating out less in favour of take-away meals and more at home
consumption. Interestingly enough we've not seen any major change in the market share in food
stores or private label beverages in carbonated soft drinks or juice.

Consumers often revert to their favourite brands during difficult times and in some categories
private label actually does worse during tougher times - the concept of "I can't afford to buy

SUE LANNIN: The growing middle class in Indonesia and Papua New Guinea helped the bottom line.
Profit there jumped 44 per cent.

Peter Kelly is the managing director for Asia.

PETER KELLY: This economic growth together with low fuel and food inflation continues to be a major
positive for consumer sentiment in Indonesia.

In addition the recently re-elected Indonesian Government remains focused on managing the economic
growth so as to maximise the benefits delivered to the wider population in improved living
standards. Our business expects to be a major beneficiary of these improved living standards over

And even the recent terror attack in Jakarta, whilst tragic, has not dampened consumer confidence
or had any measurable impact on our business.

SUE LANNIN: There are challenges ahead such as becoming a bigger force in the beer market behind
Fosters and Lion Nathan. Coca-Cola Amatil's losses from its beer business rose to more than $2
million. But Terry Davis is expecting overall earnings to rise again in the second half of the

TERRY DAVIS: In terms of the second-half earnings guidance well you know I always give you the same
caveat. The important summer trading season in November and December is still to come and assuming
the continuation of current economic conditions we expect to be able to build a high single digit
profit growth in both earnings.

For the six weeks to now we've seen lower mortgage interest rates, lower petrol prices and the July
income taxes are all having a positive impact on consumer demand and spending and we're obviously
being a beneficiary of that.

This positive sentiment may be impacted by the forecast of higher unemployment in the second half
but again only time will tell on that.

SUE LANNIN: There was also good news for phone company Optus. A rise in mobile phone earnings
pushed up revenue in the first quarter. It now has more than eight-million customers. Net profit
increased 13 per cent to $139 million.

ELEANOR HALL: Finance reporter Sue Lannin.