Chile: During 2006, CCU’s beer sales in Chile reached more than 4.7 mln hl, representing a 12.9% increase

CCU announced in its press release, February 5, its consolidated financial results, stated in Chilean GAAP for the fourth quarter and full year ended December 31, 2006. All US dollar figures are based on the exchange rate effective December 31, 2006 (US$1.00 = Ch$532.39).

The year 2006 marked new records for CCU. Volumes reached 13.4 million hectoliters (HL), consolidated revenues grew to Ch$545,797 million (US$1,025.2 million), operating income increased to Ch$79,692 million (US$149.7 million) and EBITDA to Ch$121,761 million (US$228.7 million).

CCU also had a very positive fourth quarter. Consolidated revenues grew 10.4%, operating income increased 20.1%, net income grew by 15.1% and EBITDA increased 14.8%. These results are attributable to better performance in almost all of our business segments during the quarter.

This quarter, the operating income of the Chilean beer segment increased 16.7%, explained by higher volumes and prices, which grew by 7.9% and 1.8%, respectively. During 2006, beer sales reached more than 4.7 million HL, representing a 12.9% increase. The Argentine beer business grew its revenues by 32.7% and its EBITDA by 21.8%, due to 18.0% higher average prices and 11.2% volume growth during the quarter. Prices increased due to lower discounts and a higher mix of premium products, such as Heineken and Budweiser, and one-way packaging. During the year operating income increased by 56.8%.

Fourth quarter total revenues increased 10.4% to Ch$167,175 million (US$314.0 million), as a result of higher consolidated volumes and higher average prices. Consolidated volumes growth is explained by increases of 8.9% in the soft drinks segment, 7.9% in beer Chile and 11.2% in beer Argentina, partially offset by lower sale volumes in the wine and pisco segments. The increase in average prices is explained by higher prices in almost all categories, with the exception of domestic wines, nectars and mineral water.

2006 accumulated revenues increased 8.6% amounting to Ch$545,797 million (US$1,025.2 million).

Fourth quarter gross profit increased 7.5% to Ch$92,516 million (US$173.8 million) as a result of 10.4% higher revenues, partially offset by a 14.1% higher cost of goods sold, which amounted to Ch$74,660 million (US$140.2 million). The increase in cost of goods sold is explained by the higher costs associated with the beer Chile, beer Argentina and soft drinks businesses, mainly due to increased raw material costs, partially offset by a lower cost of goods sold in the wine and pisco segments. In Q4'06, the gross profit margin, as a percentage of sales, decreased from 56.8% in Q4'05, to 55.3% in Q4'06.

2006 gross profit increased 9.2%, amounting to Ch$285,908 million (US$537.0 million). The consolidated gross margin increased 0.3 percentage point to 52.4%.

Q4'06 net income increased by 15.1%, from Ch$19,654 million (US$36.9 million) in Q4'05 to Ch$22,617 million (US$42.5 million) in Q4'06, mainly due to higher operating results, partially offset by lower non-operating results and higher income taxes. Higher income taxes are mainly explained by the better results from operations during the quarter and higher differed income taxes during Q4'06.

2006 net income increased 13.5%, from Ch$49,189 million (US$92.4 million) in 2005 to Ch$55,833 million (US$104.9 million) in 2006, mainly due to higher operating results, partially offset by lower non-operating results and higher income taxes.

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