The high Australian dollar and price cuts by the major supermarkets have forced a big writedown in the value of Coca-Cola Amatil's (CCA) packaged fruit business.
CCA's net profit fell 22.3 per cent to $459.9 million in calendar 2012 from $591.8 million in 2011.
The result included $146 million in writedowns on the assets and goodwill of the SPC Ardmona (SPCA) packaged fruit business, which has struggled to compete against privately-labelled supermarket goods, cheap imports and the high Australian dollar.
In 2011, CCA booked $110.5 million in restructuring and associated costs for SPCA.
SPC Ardmona's brands include Ardmona, Goulburn Valley, IXL and SPC.
CCA chief financial officer Nessa O'Sullivan said supermarkets Woolworths and Coles had made fruit and vegetable prices a key area of competition.
A 20 per cent cut in fresh fruit prices had resulted in shoppers shifting from packaged to fresh fruit, affecting SPCA.
"We already had the issue of the stronger Australian dollar, but overlaid on top of that, we had increased deflation of fresh fruit," Ms O'Sullivan said during a briefing on Tuesday.
Consequently, CCA had to make writedowns on stock held by SPCA.
"You have to recognise that you will realise a lesser amount if your competing product of fresh fruit is lower priced," she said.
Ms O'Sullivan said CCA had a three-year plan to restructure SPCA, which included cost cuts already delivered or in the pipeline.
She said SPCA would also be releasing new, more profitable snacking products.
"Obviously the outcomes for the business and the overall business model will be dependent upon the success and our ability to grow that higher-margin revenue," she said.
CCA also said it expected to progressively increase its investments in Indonesia by nearly half a billion dollars over the next three to four years.
Group managing director Terry Davis said growth in Indonesia was driven by the increased popularity of Fanta, Coke and Sprite, new products in the fast-growing tea and juice categories, and the roll-out of a cold drink coolers.
CCA was also expanding into the high-volume water category in Indonesia, under the Ades brand.
It would commission its first high-speed water line at its Cibitung plant in Indonesia in June 2013, which would be capable of producing 54,000 bottles an hour.
The company's operations in Indonesia and Papua New Guinea posted earnings growth of 16.8 per cent to $102.9 million for 2012.
Earnings in Australia rose 3.3 per cent to $627.4 million in 2012, while those from New Zealand and Fiji fell 11.8 per cent to $70.1 million.
Mr Davis said Australian revenue and earnings were expected to grow in 2013.
"We do, however, remain concerned by the generally weak consumer spending environment which has persisted for the last two years," he said.
CCA shares were 30 cents higher at $13.93 at 1342 AEDT on Tuesday.
CCA lifted its partly franked final dividend to 32 cents a share, from 30.5 cents.
It will also pay a special dividend of 3.5 cents, taking total dividends for 2012 to 59.5 cents.