Adolph Coors Co., the third largest U.S. brewer, said on October 22 quarterly profit rose 31.8 % on higher beer prices in North America and volume growth in Europe. Coors said third-quarter profit rose to $61.4 million, or $1.68 per share, from $46.6 million, or $1.28 per share, a year earlier. Analysts on average forecast $1.47 a share, according to Reuters Research, a unit of Reuters Group Plc. Sales rose 3.9 % to $1.04 billion. Sales volume, which excludes currency and price fluctuations, rose 4.3 %. The company said it will reduce U.S. distributor inventories in the the fourth quarter, which could cut sales growth in that period.

Leo Kiely, Coors Brewing Company (CBC) president and chief executive officer, said: "Overall, third quarter results for Coors Brewing Company reflect a considerable improvement from first-half results. Despite continuing industry headwinds in the US, we made progress in key areas of both our Americas and Europe segments.

"Although we continued to face a challenging volume environment in the US, we made significant progress in reducing operations costs and improving our sales mix. Our businesses in Canada and Puerto Rico also boosted third quarter Americas results. In Europe, very strong volume growth resulted primarily from a combination of solid sales execution, unusually warm summer weather this year and an easy comparison to weak sales in July last year."

However in the fourth quarter the company warned that as it plans to reduce US distributor inventories in the fourth quarter to be roughly in line with levels at the end of 2002, there may be an impact on the company’s ability to grow sales and leverage fixed costs in the quarter.

Kiely added that in the first few weeks of the fourth quarter Coors had some challenges shipping enough beer to meet demand from its distributors. This has resulted in additional costs in the range of about US$1m to US$3m during the first three weeks of the quarter, primarily in higher freight costs.

"We believe that our contingency planning and mitigation efforts have limited the sales impact of the transition, but we have more work to do to get all of these systems working smoothly," he said.

24 October, 2003