MONTREAL - Molson Coors Brewing (NYSE:TAP) is hiking its dividend by 16 per cent despite a flat beer market in Canada.
The international beer company says its sales in the United States and Europe did well in the fourth quarter while its Canadian operations struggled due to several factors.
Part of the reason for the weak results from Canada was the lower value of the loonie compared with the U.S. dollar, but Molson Coors said it also faced promotional challenges and soft consumer demand.
The company said its Canadian pre-tax income was down 14 per cent to US$88.9 million and, even in Canadian currency, was down nine per cent from a year earlier.
Overall, however, Molson Coors says its underlying fourth-quarter profit improved and its dividend will rise to the equivalent of 37 cents US per share on March 17, an increase of five cents.
Under standard U.S. accounting rules, including taxes, it had US$131.3 million of net income or 71 cents per share — compared with $60.1 million or 33 cents per share in the fourth quarter of 2012.
On an adjusted basis, Molson Coors reported $125.8 million of after-tax income, or 68 cents per share, compared with $126.1 million or 69 cents per share a year before.
Molson says its pre-tax income from Europe was up 11.8 per cent to $39.7 million, due to higher volumes, closer costs, better prices and a positive impact from currency fluctuations.
In the United States, its equity income from the MillerCoors beer company increased to 26.9 per cent from a year earlier to US$102.7 million.
MillerCoors's underlying net income for the quarter increased 30.2 per cent to $241.9 million, driven by marketing and administrative cost reductions, domestic pricing and brand mix, partially offset by the impact of lower volumes and commodity and brewery inflation.