US/CANADA: Molson Coors toasts soaring Q1 profits
Molson Coors has declared itself "very pleased" with its strong showing in the first quarter of this year.
The North American brewer said today (6 May) that net profit in the 13 weeks to the end of March leapt to US$37.1m from $4.4m a year ago. The increase came partly on the back of a 10.4% lift in net sales to $1.36bn, with volumes up 2.8% to 10.7m hectolitres.
Operating income also performed well, climbing to $77.7m from $53.4m in Q1 2007.
Molson Coors credited the rise in profits to strong business performance in the US and Canada and a lower effective tax rate, partially offset by accelerated incentive compensation expense and one-time debt extinguishment costs.
"We are very pleased with our first quarter results, which reflect continued strong momentum, said company president and CEO Leo Kiely. "Across the board, our teams have remained focused on creating profitable growth by building brands and reducing costs. Based on the strength of our brands, sales execution and cost-reduction initiatives, our US and Canadian businesses once again delivered positive pricing and strong sales-to-retail and bottom-line growth. In the UK, where challenging conditions still dominate the brewing industry, our team grew overall market share and net pricing."
While underlying US pretax income increased 36% to $61.9m, driven by strong sales volume growth, higher net pricing and continued savings from cost initiatives, the UK business reported an underlying pretax loss of $2m in the first quarter of 2008, a $0.7m improvement versus the first quarter 2007. UK owned brand volumes increased 1% in the first quarter, driven by a 17% increase in off-trade volume, leading to an increase in overall market share. The increase in off-trade volume was partly driven by a combination of the Easter holiday falling in the first quarter this year and customers buying in advance of an increase in beer excise tax.
Molson Coors' Canada business recorded a 41.5% increase in underlying pretax income to $64.1 million, driven by positive net pricing and a $9m benefit from favourable foreign currency.
The company also noted that it had achieved around $29m in cost reductions in the quarter, as part of its three-year, $250m 'Resources for Growth' programme.
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