Molson Coors, the world's fifth largest brewer, saw earnings slump last year on the back of continued discounting in the UK and increased competition in its key markets.

The brewer's woes continued today (9 February) when it reported a 24% fall in after-tax income to US$264.5m. Stripping out the contribution from its recently-sold loss-making Brazilian business Kaiser, Molson Coors said after-tax income was down 23% to US$335.5m.

The annual figures were hit by lower-than-expected earnings during the fourth quarter of 2005. Molson Coors' net income of US$22.4m was down from US$55.72m, a year earlier.

Molson Coors president and chief executive officer Leo Kiely said the results showed there were "challenging operative environments" in the company's key markets.

However, he added that there had been "significant improvements" across the business as the year had progressed.

Kiely pointed to rising sales in Canada and increased market share in the UK, where industry volumes fell during the fourth quarter of 2005. Coors Light sales helped prop up the company's performance in the US.

Last month, Molson Coors sold a majority stake in Kaiser to Mexican drinks group FEMSA but retained a 15% interest in the business.

Kiely said: "The Brazil sale will also allow us to focus on our biggest markets while retaining opportunities in the future for us to participate in the growing Brazil market with a strong and capable strategic partner."

He added: "Looking ahead, we will continue to focus on our other key goals for Molson Coors including capturing at least US$175m in merger-related cost synergies by the end of 2007."