Coca-Cola Amatil Ltd rose the most in four months in Sydney trading on Wednesday after Australia's biggest soft-drink maker posted first-half earnings that beat analysts' estimates.

Coca-Cola Amatil gained 5 percent to close at A$8.34 (US$7.24), its biggest climb since May 15. The climb trimmed this year's decline to 12 percent, compared with a 22-percent slide for Australia's benchmark S&P/ASX 200 Index, Bloomberg News reported.

Net income rose 22 percent to A$171.9 million in the six months ended June after domestic soda sales and price increases boosted margins.

Chief Executive Officer Terry Davis has withstood a slowdown in consumer demand by using his 60 percent share of the domestic soda market to raise prices faster than ingredient cost increases. He sold his unprofitable South Korean unit a year ago to focus on adding beer and soft drinks in the Australian market. "They are improving margins in all businesses, even in New Zealand and Indonesia where you could have expected an impact from economic slowdowns," said Theo Maas of Fortis Investment Partners in Sydney. "They probably spent way too much time trying to fix Korea and it's clear they have now focused on existing operations."

High water mark

Davis maintained his forecast for "high single digit" second-half earnings growth. The forecast "is conservative but is consistent with management's approach historically," said Andy Bowley, an analyst at Citigroup Inc.

The Sydney-based company is 30 percent owned by Atlanta-based Coca-Cola Co, the world's biggest soft-drink maker.

Earnings before interest and tax in Australia, where Coca-Cola Amatil gets almost two-thirds of sales, rose 10 percent to A$219.1 million on demand for sodas and new drinks including Glaceau Vitaminwater. The Australian profit margin, which measures earnings as a proportion of sales, rose to 19.1 percent from 17.6 percent on higher prices and sales of more profitable drinks.

"The standout performer has been Glaceau, launched in February, which is now expected to sell almost 2 million unit cases in 2008, four times the original forecasts," the company said.

Davis, 50, expanded into alcohol last year, taking over Australian distribution of Jim Beam bourbon and Absolut vodka. He also started a venture with SABMiller Plc, selling the London-based company's beers, including Pilsner Urquell and Peroni Nastro Azzurro.

In February, he agreed with SABMiller to build an Australian brewery to tap some of the A$1 billion in earnings the Australian beer industry generates. Earnings from New Zealand and Fiji rose 11 percent to A$38.2 million.