Austrian beer and beverage maker BBAG, due to be taken over by Heineken, posted a sharp decline in first-quarter operating profit due to the sluggish economy and long winter in Europe, according to Reuters.
The group, which brews beer and serves juices and mineral water to much of central Europe, said in a statement that earnings before interest and tax (EBIT) were EUR 3.4 million compared to EUR 13 million in the first three months of 2002. First-quarter sales fell 8% to EUR 221.8 million. With the exception of Austria, sales volume declined in all of the firm's principal markets in central Europe in the first quarter. In the Czech Republic sales fell 3.2%, in Hungary 7.8% and in Poland sales fell 17%. The fall in sales triggered a 96% collapse in pre-tax profits to Ђ330,000 from Ђ7.43m for the first quarter last year. Meanwhile operating profits dropped 74% to Ђ3.42m.
"The reasons for that are the same for the whole sector. In addition to the overall economic situation, those setbacks were the result of unfavourable winter weather in the region," said Chief Executive Karl Bueche. "If we include the results of the Easter business, our earnings would clearly come much closer to last year's figures," Bueche added.
The first quarter is generally the firm's weakest and most difficult to forecast. "In 2003, this figure will be significantly higher," Bueche said.
27 May, 2003
