The Canadian brewer Molson yesterday reported a 23% fall in net earnings to C$237.0m, as the company suffered from a fall in sales in Brazil.

The brewer saw virtually flat growth for the full year in consolidated operating profit (EBIT) which came in at C$512.2m.

Consolidated net sales revenue was up 0.4% to C$2.5 billion, with net sales revenue in Canada, up by 3.2%. But total Molson beer volumes were down 8.9%. Volumes in Canada were up 0.7%, although volumes in Brazil fell 17.5%.

"After several years of strong results, fiscal 2004 was disappointing for Molson, due principally to the volume decline in Brazil and Molson's slow response to the value brand segment in Canada," said Daniel J. O'Neill, president and CEO of Molson Inc.

"The focus of the last five months has been the development of action plans required to regain momentum. Putting the plans in action is critical and takes time."

The company said that 2004 earnings included a charge of C$43.3m for a plant closure in Brazil which was partially offset by a pre-tax gain of C$7.0m for a net rationalisation provision of C$36.3m as well as a C$16.0m non-cash increase in income tax expense due to higher income tax rates in Ontario.

In a statement the company said that fiscal 2004 was dedicated to preparing the groundwork for future growth in Brazil. Molson invested in numerous areas within the Brazilian organisation: it revamped Cervejarias Kaiser's sales capabilities, implemented sales centres in six regions, and hired, trained and equipped more than 1,200 sales employees in these areas.

"Retooling the organization is critical to capturing the potential that exists in Brazil. The continued support of the Coca-Cola bottler network and the continued dedication of the Kaiser employees are essential to unlocking this value. It has taken longer than originally planned, but the foundation for success remains," said O'Neill.