Molson Coors Brewing Company (NYSE: TAP)(TSX: TPX) today reported a 15.3 percent increase in fourth quarter worldwide beer volume and 9.9 percent higher net sales in the fourth quarter of 2012 due to the addition of Molson Coors Central Europe (MCCE) operations in 2012. Underlying after-tax income declined 28.4 percent for the fourth quarter 2012, driven by a higher underlying effective tax rate and the impact of cycling strong quarterly results the year before. Net income from continuing operations attributable to MCBC (a U.S. GAAP earnings measure) decreased 65.1 percent due to the factors mentioned above, as well as higher special charges and the impact of a 50 percent increase in the Serbian statutory corporate income tax rate in the quarter.
Underlying after-tax income in 2012 increased 1.3 percent to $710.5 million, or $3.91 per diluted share, due to the addition of MCCE operations on June 15, 2012. Full-year income from continuing operations decreased 34.5 percent to $441.5 million due to costs associated with the acquisition of MCCE. Underlying free cash flow increased to $864.7 million from $618.4 million a year ago, driven by an increase in operating cash flow primarily due to the addition of Central Europe and improvements in working capital.
Molson Coors president and chief executive officer Peter Swinburn said, “In the fourth quarter, our worldwide volume and net sales increased due to the addition of our Central Europe business, while underlying after-tax income declined 28 percent, driven by a higher tax rate this year and cycling strong quarterly results the year before, including an additional week in our fiscal 2011 and some other one-time factors that did not repeat.”
Swinburn added, “For the full year 2012, the biggest news was the acquisition of our Central Europe business, which we expect to strengthen our company, enhance our growth profile and increase shareholder value in the years ahead. We have begun implementing plans to capture synergies, leverage best practices and pay down debt related to this new business. This acquisition helped our worldwide volume grow by 14 percent, net sales by more than 11 percent, and underlying earnings per share by 4 percent. Also, Molson Coors generated $865 million of underlying free cash flow, up nearly 40 percent from 2011.”