US: Molson Coors sees YTD profits slump but sales still strong
- Net profits in 39 weeks to 24 September drop by 23.9% to US$383m
- Net sales increase by 11.9% to $2.89bn in same period
- Operating profits rise by 3.8% to $704.7m
- Group volumes in Q3 up by 30.8% to 17.2m hectolitres
Molson Coors saw its YTD profits drop by almost a quarter over the year before
Molson Coors has posted a 23.9% drop in year-to-date net profits, but sales and volumes remained strong as the group saw a boost from its StarBev acquisition.
Net profits fell by by 23.9% to US$383m in the 39 weeks to 24 September, the Canada and US-headquartered group said today (7 November). Net sales increased by 11.9% to $2.89bn over the same period, while operating profits rose by 3.8% to $704.7m.
The results were an improvement on Coors' first-half, when the US$3.54bn StarBev takeover pushed net profits down by about 40%, while the acquisition came too late to boost sales beyond 4%.
A 30% surge in Q3 volumes also added to today's results, the first full reporting period since the StarBev deal completed in June.
Third-quarter results saw net profits dip 0.5% to $198.4m in the 13 weeks to 24 September and net sales rose by 25.3% to $1.20bn. Operating profits increased by 19% to $304m.
President & CEO, Peter Swinburn, said strong results in the US contributed to bottom-line growth, but sounded a note of caution for the rest of the year - as falling consumer demand looks set to damage Q4 numbers.
“We expect the fourth quarter to be the most challenging of this year, with difficult profit comparisons in Canada and the UK and higher costs in the US and Central Europe,” Swinburn said.
Year-to-date volumes in the UK dropped by 4% as poor weather affected consumer demand. Net profits for the country dropped by 60% in YTD and by 70% in Q3 due to the lower volume as well as higher input inflation and pension expense and cycling a reduction in employee incentive compensation last year.
Molson Coor's Canadian and International units also saw profits fall. YTD International losses widened by 170% to $70m despite a 32% increase in volumes.
The company last month announced it will combine its StarBev division in central Europe with its UK & Ireland operations.
“These initiatives are designed to improve the efficiency of our organisation and our processes and generate additional resources to invest behind our brands and innovation, so when our core markets do turn around, we can take full advantage of it,” Swinburn said today.
Molson Coors' share price is currently down by 2.92% at $41.94 on the New York Stock Exchange.
To read the company's official statement, click here.
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