US: Molson Coors posts Q1 gains
US brewer Molson Coors has posted an improved performance in the first quarter of 2007, on the back of cost reductions and increased volumes.
First-quarter income from continuing operations after tax reached US$19.2m, and excluding special items, income from continuing operations was $25.1m, or $0.28 per diluted share, compared with an after-tax loss of $0.4m, or $0.01 loss per diluted share, in the first quarter 2006.
The results also came in ahead of analysts' forecasts which had been for around $0.24 per share. Volumes rose by 2.9% to 10.4m hectolitres, while net sales increased by 6.5% to $1.23bn.
"Overall, our first quarter 2007 results are an encouraging start to the new year," said president and CEO Leo Kiely. "We continued to strengthen our momentum from the second half of 2006 with our global focus on brand building and attacking costs. While cost and competitive pressures continued in the first quarter, our underlying business and financial performance continued to improve."
Kiely said the company had continued to invest aggressively behind its strategic brands in all of its major markets, Canada, the US and the UK. "In addition, we continued to make significant improvements to our cost structure through merger synergies and other cost reductions that helped to offset substantial cost inflation across all of our businesses," he said. "As a result, we achieved strong double-digit percentage growth in operating earnings."
Pre-tax income from the Canadian business reached $45.3m, on a par with the first quarter 2006, while Canadian sales volumes rose by 2.8%.
Pre-tax income from the US was $45.2m. Excluding special charges from last year, Molson Coors said US pre-tax income rose by 23.1%, driven by sales volume and net sales growth of 4.9% and 6.7% respectively.
The European business recorded a pre-tax loss of $4.5m, but this was lower than the $13.4m pre-tax loss for the first quarter of 2006. The company said the improvement was driven by continued progress on cost saving initiatives, which was partly offset by industry volume pressures and unfavourable trends in sales channel mix.
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