Australia-based drink and food business Coca-Cola Amatil said challenging conditions in Australia dragged its half-year profit lower.

Its half-year net profit dropped by 29% to AUD140.1m (US$110.4m) while EBIT fell by 43% to AUD312.7m.

It blamed increasing competition and discounting in its Australian drinks division. 

Group managing director Alison Watkins said: “Our April 21 trading update identified challenging conditions in Australia and their impact on the overall group result for the year.”

The firm, whose subsidiaries include packaged, ready-to eat-fruit and vegetable firms SPC Ardmona and Goulburn Valley, saw EBIT in its Corporate, Food & Services division decrease by 25.2% to AUD11.9m, due partly to a smaller contribution from the services division following the sale of its Quirks business. 

Coca-Cola Amatil suggested new products will deliver a lift in sales in the second half of 2017 but some analysts remain sceptical.

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But CMC Markets chief strategist Michael McCarthy described the outlook as grim and said the company had provided no evidence to support the idea that new products would boost second-half performance.

Coca-Cola Amatil revealed it has entered into agreements for the sale and leaseback of the Richlands manufacturing and warehousing facility in Queensland, Australia, with an expected one-off gain in the second half of the year of AUS156m.

Reports emerged last year Coca-Cola Amatil planned to sell SPC Ardoma, its Australian fruit and vegetable business, in 2017.