Efes Breweries has posted its consolidated financial results for the quarter to 31 March 2005. The brewer said yesterday (23 May) that, while sales volumes and net increased, EBITDA dropped back considerably.

Consolidated sales volumes for the brewer hit 1.56m hectolitres, compared to 1.3m hectolitres in Q1 2004, a rise of 19%. Net sales on a consolidated basis also increased by 19%, reaching US$81.7m from US$68.5m in the corresponding period a year earlier.

Profit before tax rose by 10% to US$34.9m from US$31.7m in Q1 2004.

A slight contraction in the gross profit margin was blamed on a change in the product composition with an increased share of PET presentations in the packaging mix, especially in Russia, the seasonal negative impact of capacity increases in Russia, and integration of the acquired business in Serbia & Montenegro. These businesses are to be stabilised through operational improvements with minimal effects on profitability during the rest of this year, the company said.

Profit from operations decreased to a loss of US$2.4m in the three-month period, compared to US$2.3m in Q1 2004. The change is attributable to the seasonal shift of marketing and advertising expenses, launch of the new brands Zlatopramen in Russia and Pils Plus in Serbia as well as expenses related to the restructuring of the sales and distribution system in Russia.

As a result, Efes recorded EBITDA of US$7.4m in the quarter, compared to US$12m in Q1 2004 reflecting a decline of 38%. The full year EBITDA expectation, however, is maintained in line with the volume growth expectations due to seasonal nature of the increased expenses in Q1 2005, the brewer said.

A net loss of US$7.1m was incurred in Q1 2005 compared to a net profit of US$3m in Q1 2004.