Boston, MA 05/09/2014 (wallstreetpr) – Molson Coors Brewing Company (NYSE:TAP)’s shares were up by ~4% and traded at $62.00 after the announcement of its first quarter result. The Company posted solid growth in net sales and operating margins versus prior year periods.
Factors that drive solid growth
1. Sale growth
Molson Coors Brewing Company (NYSE:TAP)’s net sales were up marginally at constant currency to $816 million due to higher sales in Europe and International market partly offset the decline sales from Canada. Worldwide beer volumes were down by 0.1%, but, the positive impact of foreign currency movement drove the overall sales.
2. Operating efficiency
The improved performance across all business drove the operating margins, EBITDA and net income. Adjusted EBITDA during the period increased by 20.4% to $251.2 million. Consequently, it raised the net income by $135.9 million and underlying (adjusted) net income to $102.2 million or $0.55 per diluted shares (1Q2013: $47.5 million or $0.26 per diluted shares).
3. Positive operating cash flow
Growth in net income and positive change in working capital improved the operating cash flow to $149.7 million. Free cash flow used in 1Q2014 was $64.6 million, $15 million higher than the previous year due to increasing in investment. So, higher capital spending and repayment of long-term debts compressed Molson Coors Brewing Company (NYSE:TAP)’s net cash balance compared to prior year quarter.
4. Financial position
As of March 31, 2014, Molson has a strong balance sheet with the cash balance of $337.6 million, shareholder’s equity of $8.6 billion and $3.79 billion of total debt. Net debt reduced to $3.46 billion, by $685 million lower than prior year period. The debt/equity ratio was 0.44, which is below the industry average.
Conclusion
Molson Coors Brewing Company (NYSE:TAP) expects positive growth across all its businesses in coming quarters that will help to increase its operating margins and net income. MillerCoor’s premium products – Above Premium and Premium Lights continues to drive growth for Molson.
