By Alkman Granitsas
Of DOW JONES NEWSWIRES
ATHENS -(Dow Jones)- Greece's Coca-Cola Hellenic Bottling SA (CCH), the world's second largest bottler of Coca-Cola products, reported Thursday a 3% drop in net profit, as ongoing cost cutting efforts failed to offset lower revenues, and warned of tough months ahead.
"We witnessed a further deterioration in trading conditions during the third quarter, particularly within our developing and emerging market segments," said Chief Executive Officer Doros Constantinou in a statement.
"We expect the economic environment in these segments to continue to remain highly challenging for the balance of this year and into next year, and we continue to believe the timing of the recovery will lag that of our established markets," he added.
Net profit for the three-month period ending Oct. 2 fell to EUR206.1 million from EUR213 million in the same period a year ago. Revenue fell 9% to EUR1.88 billion from EUR2.07 billion.
The figures were in line with analyst expectations of EUR205 million in net profit and EUR1.96 billion in revenue.
CCH - which has operations in 28 countries, mainly in eastern Europe - has been hit hard by the economic crisis in those countries as a result of lower consumer spending and adverse foreign exchange movements.
At the same time, it has also seen key third quarter sales in its more developed Mediterranean markets - such as Italy, Greece and Cyprus - suffer as a result of a weak travel and tourism market this summer.
The bottler has targeted EUR120 million in cost savings this year in an effort to offset the sales slump stemming from the economic crisis.
Coca-Cola Hellenic shares closed Wednesday up 1.1%, at EUR17.49, with the shares trading at a median price-to-earnings ratio of about 12 times 2009 earnings.
In mid-September, CCH said it planned to return EUR548 million in excess capital to shareholders through a special dividend of EUR1.50 per share. Since then, the stock has risen more than 10%.
Company Web Site: www.coca-colahellenic.com
-By Alkman Granitsas, Dow Jones Newswires; +30 210 331 2881; alkman.granitsas@dowjones.com