US: StarBev buy hampers Molson Coors H1 profits, but sales stay steady

By | 7 August 2012

  • H1 net profits fall by 39.6% to US$184.6m
  • Net sales in six months to end of June inch up by 4.1% to $1.69bn
  • Operating profits slip by 5.5% to $400.7m
  • StarBev buy closes on 15 June
Molson Coors released its H1 results earlier today

Molson Coors released its H1 results earlier today

Molson Coors has seen the closure of its "strategically compelling" purchase of StarBev hamper its first-half results, but a lift in worldwide volumes helped keep sales on course.

H1 net profits fell by 39.6% to US$184.6m in the six months to the end of June, while sales were up by 4.1% to $1.69bn, the North American brewer said today (7 August). Operating profits slipped by 5.5% to S400.7m. 

In Q2 net profits also slipped, down by 52.3% to $105.1m. However, net sales edged up to $999.4m. Global beer volumes in the three-month period were up by 6.4% to 13.9m hectolitres. 

The boost in sales was driven by a "positive performance" in its JV with SABMiller in the US, MillerCoors, and the inclusion of two weeks of Molson Coors Central Europe (MCCE) operations in the  results, the company said. MillerCoors' net profits in Q2 rose by 9.1% to $436m due to "positive pricing, favourable brand mix and cost management". MCCE is the new name for the StarBev operations, which Molson Coors acquired earlier this year.

In Canada, Coors' underlying pre-tax profits fell by 0.6% to $139m in Q2, due to "adverse foreign currency movements". The UK also took a hit, with pre-tax profits dropping by 19.3% to $28m in the quarter, due to "lower volume, higher pension expense and higher marketing investment".

On the StarBev acquisition, which completed in June, Molson Coors' president & CEO Peter Swinburn said the firm regards the buy as a "strategically compelling and financially attractive transaction". 

He added: "We expect this acquisition to increase shareholder value toward the early part of our 3-to-5 year return range."

Looking ahead, Swinburn said the strategy included "leveraging our above-premium portfolio and scaling our existing business in emerging markets".

Shares in Molson Coors were up by 5.15% at $42.32 today.

To read the brewer's official statement, click here.

To read Molson Coor's Q1 figures, click here.

Expert analysis

Molson Coors Brewing Company (TAP) - Financial and Strategic SWOT Analysis Review

Molson Coors Brewing Company (MCBC), a holding company that manufactures and markets beers and beverage products through its subsidiaries. The company offers a wide range of product portfolio under its owned or partner brands. The company operates through four reportable segments, namely, Canada, the US, the UK, and Molson Coors International (MCI). Some of its major brands include Coors Light, Molson Canadian and Carling. It also markets various other brands such as Rickard's Blonde and other Rickard's brands, Molson Export, Molson Dry, Molson Canadian 67, Molson M, Rickard's Red, Carling, Carling Black Label, Creemore Springs, the Granville Island brands, Pilsner, Keystone, among others. MCBC is headquartered in Denver, Colorado, the US. The company focuses on the expansion of its business and product portfolio through inorganic growth, as recently it acquired StarBev, which operates nine Central and Eastern Europe.

Sectors: Beer & cider, Company results

Companies: Coors, SABMiller

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