The Canadian brewer, Molson Inc., has posted earnings of C$54.7m (US$39.6m), or 42 Canadian cents per share, for the first quarter to the end of June, down from C$100.7m, or 77 Canadian cents per share, in the corresponding period last year.

The company attributed the lower first-quarter profit to a drop in sales and volumes in Brazil.

However, the company said it was confident that the performance of its Brazilian subsidiary, Kaiser, would turn around, adding that sales rose dramatically in July.

"We knew it was coming, but I am feeling very good about Brazil. I expect we will improve in Brazil and the steps taken were required," said Molson's president and chief executive, Daniel J. O'Neill. "The original profit, market and volume share targets for Kaiser will be met or surpassed for the year."

The first-quarter results included a C$43.3m charge in respect of the closure of the plant in Ribeirao Preto in Brazil last June, as well as a pre-tax gain of C$7.0m arising from a property sale in Canada.

Molson said comparable earnings per share for the quarter came in at 67 Canadian cents per share, up from 55 Canadian cents per share in the first quarter of last year. This was marginally below the average forecast of 68 cents per share from a Reuters poll of analysts.

Sales revenues for the first quarter fell by 3.6% from C$687m to C$662m, while overall beer volumes fell by 12%. However, volumes were actually ahead in Canada and the US, the company said, but were 27% down in Brazil.