Kofola shares weaken due to floods, investors fear impact on production

Shares in Kofola $KOFOL.PR-1.5% fell as much as five per cent in Monday morning trading on the Prague Stock Exchange, dropping to CZK 319 per share. Later in the day, however, it recouped some of the losses. The main factor contributing to the decline was the extensive flooding that has hit the Czech Republic in recent days, particularly in the northeastern regions where Kofola operates several of its key production facilities.

The most affected were Kofola's plant in Krnov and breweries in Litovel and Hanušovice, which were reportedly partially flooded. This has raised concerns among investors who are taking into account the potential impact of this situation on the production and distribution of the company's beverages. Although Kofola has not yet issued any official statement on the situation, Jan Bystřický, an analyst at Česká spořitelna, said that the market is reacting to information about the extent of the damage and the disruption of operations at the production facilities.

"This news is definitely not good for Kofola," Bystřický said. "The floods are likely to cause not only material damage but also disruption to sales and logistics, especially in Moravia." According to Bystřický, a loss in the higher tens of millions of crowns in operating profit can be tentatively expected, which could affect the company's financial results in the coming quarters.

How do you view the situation? Are you buying or selling?