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Molson Coors Brewing Co. reported Tuesday that its net earnings fell more than 53 per cent to $104.3 million US in the second quarter on costs linked to the North American beer maker's expansion in Central Europe.
The Denver and Montreal-based brewer, which reports in U.S. dollars, said it earned 57 cents per share for the period ended June 30. That compares with $1.19 or $224.3 million a year earlier.
Excluding one-time costs, Molson Coors earned $250.1 million or $1.38 per share, compared to $231.6 million or $1.23 per share in the prior period.
Net sales increased seven per cent to $999.4 million driven by the performance of its U.S. business and inclusion of two weeks of operation of the StarBev acquisition in Central Europe.
Worldwide beer volume was up 6.4 per cent to 13.9 million hectolitres.
The acquisition of StarBev was completed June 15 at a final purchase price was 2.7 billion euros or $3.4 billion, including the assumption of debt.
Molson Coors president and chief executive officer Peter Swinburn said the acquisition is a "strategically compelling and financially attraction transaction" that should increase shareholder value in three to five years.
In Canada, underlying pretax income decreased 0.6 per cent to $139.0 million due to foreign exchange. Income increased four per cent in Canadian dollars driven by higher volume, higher net pricing, cost reductions, and income from the addition of North American Breweries contract brewing.
Sales-to-retail and sales volume increased 1.8 per cent due to the addition of Canada Day in this year's second quarter from the third quarter in 2011.
Molson Coors' market share in Canada decreased about one-half share point from a year ago on estimated industry growth of three per cent.
Net sales per hectolitre increased six per cent in local currency, with more than half of the increase driven by continued higher pricing, and the remainder due NAB contract sales.
Cost of goods sold per hectolitre increased six per cent.
Molson Coors underlying U.S. segment pretax income increased 7.2 per cent to $184.6 million.
MillerCoors underlying net income excluding special items, increased 9.1 per cent to $436.0 million, driven by increased pricing, favourable brand mix and cost management.
Domestic sales-to-retail fell 1.4 per cent.
In Britain, underlying pretax income decreased 19.3 per cent to $28.0 million due to lower volume, higher pension expense and higher marketing costs.
On the Toronto Stock Exchange, Molson Coors shares closed up $1.48, or 3.57 per cent, at $42.99.