CANADA: Brazil tax gain lifts Molson Coors' Q1 profits
Demand for Molson Coors beers still sluggish
Proceeds from a tax settlement in Brazil lifted Molson Coors Brewing Co's first quarter profits and helped the brewer to offset ongoing sluggish demand for beer in its core western markets.
A one-off gain of US$42.6m from the firm's former Brazilian business, Cervejarias Kaiser Brazil, saw net profits rise by 38% to US$104.6m for the three months to the end of March. Net profits were $75.7m in the same period of the previous year, Molson Coors said today (4 May).
However, net profits excluding this gain fell by more than 25% to $62.8m, compared to $80m a year earlier.
Beer volume sales fell by 4%, although price rises in the UK helped the brewer to increase net sales to $661m for the quarter, against $559m in 2009.
"In the first quarter of 2010, we continued to face challenging economic and beer industry conditions, primarily as the result of high unemployment and a slow recovery in consumer confidence," said Molson Coors CEO Peter Swinburn.
"Nevertheless, we are seeing signs of progress in key areas of our business, as a result of our continued investment and focus on brands and innovation," he said. He picked out volume and market share growth in Canada, underlying earnings growth at MillerCoors in the US and higher margins in the UK as positive highlights of the quarter.
Operating profits for the three months fell to $107.5 versus $117.2m in the same period of 2009.
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