CANADA: Molson reports 35% rise in Q2 earnings
Molson has reiterated its earnings guidance for the full year of EPS of C$1.95 to C$2.00, with growth in operating profit of 20% to 25%.
The company attributed the strong second quarter performance to the consolidation of its Kaiser brewing subsidiary in Brazil and the favourable pricing environment over the past 12 months. "Volume turnaround in Molson USA points to very promising momentum, and efforts to bolster the capabilities of our distribution partners in Brazil are progressing at an accelerated rate," said the brewer's president and CEO, Daniel J. O'Neill, president and chief executive. O'Neill said that price rises were expected by year-end in Brazil and in other markets in the new year.
Sales revenues in the second quarter rose by 22% to C$685.6m. Net sales in Canada increased from C$523.2m to C$570.6m, while Brazilian net sales surged from C$23.2m to C$96.0m. The company said that its total beer volumes had risen by 52% to 5.8m hectolitres, though volumes in Canada were only up by 2.4%.
Molson's market share in Canada fell by 0.5% to 44.6%, the company said. While expressing disappointment in the loss of share, which he attributed primarily to competition from smaller brewers in the Ontario market, O'Neill was relatively bullish about the coming year. He said the company was planning to launch new products, create a business development and innovation division and increase marketing efforts next year.
"I am disappointed in the share results for the quarter," O'Neill said. "We are doing well but I want to get better next summer. We want our core beers to grow faster in the next three years."
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