Tag Archives: coronavirus lockdown

Coca-Cola reports 33% decline in Quarterly earnings due to Coronavirus

Posted on by
Reply

The global beverages giant Coca-Cola on Tuesday reported second quarter 2020 results that showed 33% decline in its earnings, though the company is optimistic on strategic actions to emerge stronger from the ongoing coronavirus pandemic.

The Coca-Cola system remained agile in the second quarter, with a focus on maintaining a safe
environment for employees while also providing necessary products and services to consumers, customers and communities during this unprecedented time, said the company.

“I’m proud of the people of the Coca-Cola system as we continue to adjust and accelerate our strategies in this fastchanging landscape,” said James Quincey, chairman and CEO of the Coca-Cola Company. “We believe the second quarter will prove to be the most challenging of the year; however, we still have work to do as we drive our pursuit of ‘Beverages for Life’ and meet evolving consumer needs.”

Highlights of Quarterly Performance

• Revenues: Net revenues declined 28% to $7.2 billion. Organic revenues (non-GAAP) declined 26%. Revenue performance included a 22% decline in concentrate sales and a 4% decline in price/mix. The revenue declines were primarily driven by pressure in away-from-home channels, which represent approximately half of the company’s revenues.
• Margin: Operating margin, which included items impacting comparability, was 27.7% versus 29.9% in the prior year, while comparable operating margin (non-GAAP) was 30.0% versus 30.3% in the prior year. Operating margin contraction was primarily driven by top-line pressure and currency headwinds, partially offset by effective cost management.
• Earnings per share: EPS declined 32% to $0.41, and comparable EPS (non-GAAP) declined 33% to $0.42.
• Market share: The company lost value share in total nonalcoholic ready-to-drink (NARTD) beverages as an underlying share gain was more than offset by negative channel mix due to pressure in away-from-home channels, where the company has a strong share position.
• Cash flow: Year-to-date cash from operations was $2.8 billion, down 38%. Free cash flow (non-GAAP) was $2.3 billion, down 40%.

Business Environment 

Since the company’s last earnings update in April, global unit case volume trends have improved sequentially, from a decline of approximately 25% in April to a decline of approximately 10% in June. Unit case volume for July month-to date was down mid single digits globally. Performance has been driven by improving trends in away-from-home channels, along with sustained, elevated sales in at-home channels.


While the company believes the second quarter will be the most severely impacted quarter of the year, given the ongoing uncertainty surrounding the coronavirus pandemic and levels of lockdown, the ultimate impact on full year 2020 results is unknown. The company’s balance sheet remains strong, and the company is confident in its liquidity position as it continues to navigate through the crisis.

Despite the high degree of uncertainty, the company said it is committed to emerging stronger by gaining share and consumers, maintaining strong system economics, strengthening its reputation with stakeholders and positioning the organization to win in the new reality.

CSR Activities

The Coca-Cola Foundation has partnered with the world’s largest humanitarian network,
the International Red Cross and Red Crescent Movement, and supported programs in more than 60 countries, reaching an estimated 7.5 million people impacted by the pandemic.

In the first original ad during the pandemic for brand Coca-Cola, the company offered “The Great Meal” that features 13 real households in eight countries preparing and sharing home-cooked meals over an ice-cold Coca-Cola, bringing to life the comfort and authenticity of the brand’s connection to food.

However, the company has paused social media activity for July to review policies, including its own, and to hold partners to a higher level of accountability and transparency. The company has committed to spend an incremental $500 million with Black-owned suppliers over the next five years in the United States.

In support of social justice, the Coca-Cola Foundation has contributed $4 million to several initiatives and, to date, the company has contributed an additional $1.3 million through brands Coca-Cola and Sprite.

Coronavirus: Loosening COVID-19 restrictions now is not a good idea, says expert

Posted on by
Reply

Now that India and other glbal nations are being forced to re-open normal life and movement, here is an expert from Monash University in Australia who differs strongly at this idea as too early to reap the benefits of lockdowns in several nations that could effectively bar the spread of coronavirus or COVID-19.

Ever since the coronavirus hit the city of Wuhan in December last year, more than two months went in observing how the virus transfers from human to human and what kind of restrictions China imposed to contain the virus. When the infection entered Europe and destroyed several historic cities and devastated the economies, US woke up to the dangers more intensely than previously thought.

While most of the world’s scientists are working on developing a vaccine, “the bottom line is that we simply don’t yet know enough about how it works,” says Stephen Turner, Professor of Microbiology at the  Monash University. He warns that the COVID virus can’t be wished away by opening gyms, allowing sports like boating and golf, and resuming church congregations, which may relieve those who feel their personal rights have been stymied, but it’s no signal that this virus has been conquered.

“In this world we’ve created of instant gratification, we equally expect a pandemic to be studied, solved and an answer made available to everyone, so we can all return to our normal lives,” he said.

Short-lived South Korean example

Citing South Korea, one of the countries that has done an exemplary job of dampening the disease with social distancing and widespread testing, some people who recovered from coronavirus have retested positive, according to the Korea Centers for Disease Control and Prevention (KCDC). Alongwith Singapore, these two nations showed how to flatten the COVID-19 curve, but then a spike in new cases washed offsuch hopes. Many of them showed negligible and below the detection of current tests, according to KCDC deputy director Kwon Joon-Wook.

But the prospect of people remaining positive for the virus, and therefore potentially infectious, is of utmost concern now when life is returned to normal levels. Of the more than 4 million people globally who have tested positive for the virus, more than one million have recovered and assuming they’re OK to interact with those who haven’t been infected is not true.

“We simply don’t know whether they remain infectious, all while the world is already starting to pull back on lockdown laws and allowing people to congregate with restrictions… Thankfully, the virus doesn’t appear to mutate much, which makes the development of a universal vaccine easier, but its super power may be that, as appears to be the case for other human non-SARS coronaviruses, immunity wanes over time – so those of us who have been infected, and think we’re immune against developing or spreading the disease, may only be confident in that for a period of time.” 

A recent study by Chinese researchers published in The Lancet, showed that those with severe COVID illness have, not surprisingly, a heavier viral load, and took longer to rid themselves of the virus. Other data suggests that about seven in 10 of those mildly infected actually develop antibodies to kill the virus and eradicate it from the body. This will be crucial in the development of a prototype vaccine.

“Every day we learn something new about this coronavirus. But most often, like these cases of South Koreans mysteriously testing positive after ridding themselves of the disease, what we learn every day is how little we know about how SARS-CoV-2 operates. To assume we can just resume our previous normal lives, when we still don’t truly know what we’re fighting, could be considered premature,” writes Stephen Turner.

IMF optimistic about India’s growth at 7.4% in 2021, if coronavirus is contained now

Posted on by
Reply

The International Monetary Fund (IMF) mission chief has a good news for India stating that if India is able to contain the coronavirus outbreak in the country, it can look forward to bounce back to 7% growth rate in 2021.

In virtual spring meeting, the IMF official said India would grow 1.9% for the current fiscal year that ends on March 31, 2021, which it says is on the positive side alongwith China in the world as all major economies are experiencing worst fears of negative growth with manufacturing halted and running into debt-ridden future. For the next financial year, IMF projected the Indian economy could grow at 7.4%.

That forecast by IMF mission chief Ranil Salgado in a CNBC’s “Squawk Box” on Monday was based on the global financial agency’s observations that India is capable of resilient economy with very large external buffers and reserves to boost spending, meeting the country’s health-care needs, extending support for the more vulnerable businesses and households.

Food and Foreign Reserves

On the food front, when the U.N. Food and Agriculture Organization sounded the alarm over a looming food crisis, Salgado said India has substantial food buffer. “I think one concern is the rabi crop harvest, which is coming up,” he said. Rabi crops are sown in winter and harvested in spring.

“That’s based on a control of the pandemic, ending the lockdowns, and then stimulus that is already (given), in terms of monetary policy, and some initial steps on fiscal policy as well,” he said. “Finally, India gets a tailwind from the lower oil prices.”

So far, India has reported 17,265 confirmed cases of infection and 543 deaths as of April 20, while 2,546 patients have recovered. The nationwide lockdown is unlikely to open nonessential businesses and services until May 3. India has already announced a $22.5 billion fiscal package to help millions of daily wage earners. On Wednesday, agriculture and some essential industries in rural areas have been given approval to resume.

“In rural India, the possibility of social distancing is more–you’re more able to do that in, compared to, say, in urban India. I think the government is concerned about ensuring adequate food supplies and is making effort to do that,” Salgado said.

Once the economic shock passes, it’s important that India returns to its path of undertaking long-term reforms, he advised.