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Higher costs | Molson Coors posts lower profit



The big boss of Molson Coors Beverage Company believes that inflation has been a “significant headwind” for the brewer, weighing on its third quarter profits even as its sales increased.

The company has faced particular challenges in Central and Eastern Europe, where energy costs and inflation are significantly affecting consumers’ disposable income, Gavin Hattersley said on a conference call on Tuesday. with analysts.

The brewer posted net income of US$216.4 million, or 99 cents per share, for the quarter ended Sept. 30.

By comparison, it had made a profit of US$453 million, or US$2.08 per share, in the same period a year earlier.

Annual inflation slowed after hitting nearly 30-year highs in recent months, but remained elevated in September at 6.9%.

However, food price inflation proved more tenacious, with food prices rising 11.4% year-on-year. They rose in September at their fastest rate since August 1981 and have risen at a faster rate than all elements of the consumer price index for 10 consecutive months.

The increase in food prices comes as Molson continues to face competition from craft brewers and the market shows growing interest in the sparkling water, soda and other non-alcoholic category.

However, despite weaker demand in the beer industry in Molson’s Central and Eastern European markets over the past quarter, Mr Hattersley did not seem overly concerned about the future. of this category.

“Beer has been around for 1000 years. It is the most popular alcoholic drink in the world. In fact, excluding water and tea, beer is the third most popular drink in the world, so I don’t think it’s going to go away, and that’s what our results over the past few years suggest.” , explained Mr. Hattersley.

“If you go back a few years, people thought light beer was dead because of sodas, and […] I don’t think we still hear much about it today. In fact, we hear quite the opposite. »

Net sales for the quarter totaled $2.94 billion, compared to $2.82 billion in the third quarter of 2021.

Molson Coors’ underlying net income was US$1.32 per share for its most recent quarter, down from US$1.75 a year ago.

Analysts on average had expected earnings of US$1.36 per share and revenue of US$2.89 billion, according to forecasts compiled by financial data firm Refinitiv.

Molson’s stock lost $4.51, or 6.4%, on Tuesday on the Toronto Stock Exchange, where it closed at $65.49.

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