Denver-based Molson Coors Brewing Co., which owns MillerCoors LLC, today reported its second quarter net income increased significantly as it integrated the rest of the MillerCoors division.
Net income was $323.3 million, or $1.49 per diluted share, up from $172.3 million, or 80 cents per share, in the second quarter of 2016.
Revenue was $3.1 billion in the second quarter, up from $986.2 million in the second quarter of 2016.
Operating income was $537.5 million in the second quarter, up from $267.8 million in the year-ago quarter. Marketing, general and administrative expenses increased considerably, from $313.6 million in the second quarter of 2016 to $781.2 million in the most recent quarter. Cash from operations also rose sharply, up $536.1 million to $818.5 million year-over-year, with the addition of MillerCoors cash flows.
U.S. net income from continuing operations was up 4 percent on increased brand volume, higher net pricing, positive sales mix, cost savings and lower marketing spending, the company said.
The MillerCoors division reported operating income of $485.4 million in the quarter, up from $435.7 million the second quarter of 2016. Revenue was $2.1 billion, flat from the second quarter of 2016.
Molson Coors is evaluating value creation from the MillerCoors transaction through underlying net earnings ($358.9 million), transaction-related cash benefits ($103 million) and transaction-related after-tax book amortization ($11 million).
In October 2016, Molson Coors took full ownership of MillerCoors when SABMiller sold its 58 percent stake to joint venture partner Molson Coors for $12 billion. Before the joint venture was formed, SABMiller’s U.S. operation, Miller Brewing, was based in Milwaukee. MillerCoors still has about 1,200 employees and brews about 10 million barrels per year at its brewery in Milwaukee’s Miller Valley. It also brews Leinenkugel’s and specialty beer at its 10th Street Brewery in Milwaukee.
“In the second quarter, we continued to drive our First Choice for Consumers and Customers agenda, with laser focus on strengthening our core brands, premiumizing our portfolio, accelerating our international footprint, enhancing our customer partnerships, and driving the integration of MillerCoors and the Miller brands globally to unlock synergies and other cost savings,” said Mark Hunter, president and chief executive officer of Molson Coors. “As a sign of progress against this agenda, our team delivered solid growth in constant currency net sales, global brand volume, underlying EBITDA, net income, earnings per share and free cash flow. Additionally, we exceeded our goals for cash generation and debt reduction in the first half of this year and have maintained our investment-grade debt ratings. Our second quarter performance was in-line with our expectations, and we remain on track to deliver our 2017 business and financial plans, cost savings targets and cash flow goals.”
