C-C Amatil managing director David Kennedy told a Australia-Israel Chamber of Commerce luncheon that volumes in 1998 would be slightly lower than 1997 and below its earlier expectations.

But South Korea's earnings in 1998 would be around expectations because of a stronger currency and cost cuts, meaning there was unlikely to be much impact on EPS in 1998.

"... Although probably in 1999 there will be some dilution," Kennedy said.

C-C Amatil said last week it expected no material effect on EPS from Korea in 1998 but did not detail the outlook for 1999.

Kennedy said he would travel to South Korea on Thursday to assess the impact of recent floods there on C-C Amatil's business and the overall operations.

Later, Kennedy told reporters that the floods in South Korea had some impact on C-C Amatil's operations but theextent was unclear and he would assess this on his visit to Seoul later this week.

He said the company would be reassessing its forecasts for the Korean operations due to the lower than expected volumes in calendar 1998, the impact of the floods, and the general economic situation there.

"We certainly have got to look at that in light of what has happened in 1998," he said.

C-C Amatil would still use its previous forecasts in Korea as targets but he was not prepared to restate them as current forecasts.

The company had predicted a cash operating profit of A$9.3 million from South Korea this calendar year and a trading loss of A$12 million, with the $460.5 million purchase from major shareholder The Coca Cola Co announced on February 5 this year as part of a global restructuring for the Australian-based firm.

Kennedy said C-C Amatil expected to know within 30 to 60 days the full impact of the business downturn there and the floods.

C-C Amatil said in its May prospectus it expected earnings fromKorea in the short to medium term would be relatively lower than its other Australian and Asian businesses.

It forecast in that prospectus that Korean sales volumes were expected to rise in calendar 1998 to 145.5 million unit cases from 134.4 million unit cases in 1997, but downgraded this forecast last week when it said volumes were likely to be slightly lower than in 1997.

It said however last week that lower costs and the stronger Won meant that 1998 profitability was still in line with prospectus and that EPS would not be materially affected.

C-C Amatil had said in the May prospectus that the Korean acquisition would be dilutive in 1998.

C-C Amatil did not spell out in its prospectus any specific financial forecasts from Korea in 1999 and beyond.

C-C Amatil completed the Korean acquisition on August 6, buying the assets from the Coca Cola Co for A$975.2 million, made up of 142.2 million C-C Amatil shares.

This lifted The Coca Cola Co's stake in C-C Amatil to 42.89 per cent from 33.36 per cent.