Chile: Quilmes Industrial (Quinsa) S.A. announced on March 2 its results for the six months and full year ended December 31, 2004. Results for the previous year, that is full year 2003, consolidate the operations of Companhia de Bebidas das Americas ("AmBev")'s former Southern Cone Assets for eleven months, following the closing of the strategic alliance between AmBev and Quinsa on January 31, 2003. Thus, AmBev's beverage operations in Argentina, Paraguay and Uruguay have been consolidated as of that date.

For the Second half 2004 beer volume sales increased to 8,171,000 hectoliters from 7,689,000 hectoliters a year earlier, due to improvements in all of the Company's markets and particularly in Argentina and Bolivia. Volumes for soft drinks increased 14% to 3,695,000 hectoliters, reflecting the strong recovery of the market in both Argentina and Uruguay.

Net sales increased approximately 17% to US$ 415.1 million, from US$ 353.8 million in the second half 2003. This was principally the result of higher average prices for beer, particularly in Argentina and Paraguay, and for soft drinks in Argentina. Further, an increase in beer volumes, particularly in Bolivia and Argentina, and in soft drink volumes in both Argentina and Uruguay, also contributed to the improvement in revenues.

Gross profit increased to US$ 220.5 million from US$ 187.5 million a year earlier. This was largely the result of higher volume sales in all of the Company's markets and also price increases, particularly in the Argentine beer business and in Paraguay. Also contributing to the increase in gross profit were continuing cost reductions and improvements to the Company's industrial efficiency. Partially offsetting these improvements were certain cost increases, such as labor, PET and utility rates, particularly in Argentina. The price of barley has declined by approximately 24%, leading to a one-time charge of US$ 7.7 million on inventories. Gross margin was virtually unchanged at 53.1%, compared to 53.0% for the second half of 2003. Barring the one-time effect of the barley charge, gross margin would have been 55.0% in 2004.

Selling and marketing expenses increased 10% to US$ 86.7 million, largely as a result of higher advertising expenses in the Argentine soft drinks business, in Paraguay and in the Argentine beer business. Transportation costs also increased, particularly in Argentina and Uruguay, due to higher volumes, a larger proportion of direct sales in Argentina, and increases in labor and fuel oil costs. Despite this fact, total consolidated selling and marketing expenses declined 1.3 percentage points over sales, further pointing to the successful implementation of synergies with AmBev's former businesses.

For the twelve months ended December 31, 2004, beer volumes increased 7.8% to 15,376,000 hectoliters, reflecting strong volume growth in all of our markets, with the exception of Chile, where we stopped selling the Heineken brand in June 2003. Beer volume growth was particularly strong in Paraguay and Uruguay, both markets that had suffered large volume declines in 2003. Bolivia and Argentina also posted solid growth. Soft drink volumes increased 11.1% to 6,770,000 hectoliters as a result of continued market growth in Argentina, and of a strong recovery in Uruguay.

For the full year 2004 net sales were US$ 765.2 million compared to US$ 622.7 million for the same period in 2003. This was principally the result of higher pricing, particularly in Argentina. Also contributing to the increase in revenues were the higher volumes in Argentina, Bolivia, Paraguay and Uruguay. Gross profit for full year 2004 was US$ 410.7 million, a 36% increase on the US$ 301.4 million of 2003. This was principally the result of a substantial increase in revenues, and also of cost savings due to improvements in industrial efficiency. Gross margin for 2004 fiscal year was 53.7%, compared to 48.4% in 2003. In fact, excluding the one-time charge related to barley inventories, which is mentioned above, gross margin for 2004 would have been 54.7%.

Selling and marketing expenses increased 11.1% reflecting higher advertising expenses in the Argentine soft drink business, Bolivia and Paraguay, and higher costs of freight in all of the Company's markets. Thus, operating profit for the year 2004 was US$ 214.9 million, compared to US$ 119.5 million in 2003.

Total beer volume sales in Argentina, including exports, increased 3% compared to the second half 2003, reaching 5.5 million hectoliters. The Company's market share reached 79.1% for the full year, according to Nielsen. The Company continued to be very active in terms of marketing actions. After re-launching the Iguana brand in the premium segment of the market during the first half of the year, Quinsa introduced the locally brewed Stella Artois brand in the same segment, in November. The Company thus continues to consolidate its presence in the on-premise channel, in an effort to enhance the current gap between our share of market and our share of value.

Chile: Quinsa's domestic beer volumes increased 6.8% to 204,000 hectoliters from 191,000 last year, while market share was stable at 11%. Net revenues increased to US$ 12.2 million, compared to US$ 11.1 million last year. This was principally the result of an increase in volume sales. A 7.8% appreciation of the Chilean peso more than compensated for aggressive pricing for one-way formats in the supermarket channel, which was used to meet actions by the competition. The Company continued to strengthen its regular Becker brand, especially in the traditional channel. Becker volumes grew 9% during the second semester of 2004, compared to the previous year. A tight control on selling, marketing and administrative expenses has allowed the business to post a 33% increase in EBITDA for the second half of the year compared to 2003, and to double EBITDA for the full year, also compared to 2003.

Uruguay: The Company has followed a policy of not increasing prices since 2003. This policy, in addition to a solid performance of the Uruguayan economy, has led to an increase in domestic beer volume sales of more than 20%. Thus, total domestic beer volume was 334,000 hectoliters, compared to 276,000 hectoliters during the second half of 2003. Soft drink volumes also posted strong growth, reaching 152,000 hectoliters compared to 116,000 hectoliters for the second half of 2003.

Quinsa is a Luxembourg-based holding company that controls 87.6% of Quilmes International (Bermuda) ("QIB"). The remaining stake is held by Beverage Associates (BAC) Corp. ("BAC") and by Companhia de Bebidas das Americas -- AmBev ("AmBev"). Quinsa, through QIB, controls beverage and malting businesses in five Latin American countries. Its beer brands are strong market leaders in Argentina, Bolivia, Paraguay and Uruguay and have a presence in Chile. Further, pursuant to the Company's strategic alliance with AmBev, it has entered into license and distribution agreements to produce and sell in Argentina, Bolivia, Chile, Paraguay and Uruguay the AmBev brands. Similarly, under the agreements AmBev may produce and distribute Quinsa's brands in
Brazil. Quinsa's Class A and Class B shares are listed on the Luxembourg Stock Exchange (Reuters codes: QUIN.LU and QUINp.LU). Quinsa's American Depositary Shares, representing the Company's B shares, are listed on the New York Stock Exchange (NYSE:LQU).

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