COMUNICADO de Quilmes Industrial

Quilmes Industrial (Quinsa) S.A. announces 2001 fourth quarter and

twelve month results

LUXEMBOURG, 14 (PRNewswire)

Quilmes Industrial (Quinsa) S.A. (NYSE: LQU) ("Quinsa" or the

"Company") today announced its results for the three and twelve

months ended December 31, 2001.

Results included herein are presented, as is the Company's

practice, according to the Generally Accepted Accounting Procedures

("GAAP") of Luxembourg. In other words the base currency used for the

consolidated financial statements is the US dollar, and therefore

events such as the recent devaluation of the Argentine peso have no

effect on dollar-denominated assets and liabilities (notably on fixed

assets and dollar-denominated debt). This is the same method used

under US GAAP for countries whose economies experience high levels of

inflation.

Since the Argentine peso has suffered a significant depreciation

vis-a-vis the US dollar, but for US GAAP purposes its economy does

not qualify as one with a high level of inflation, the base currency

for Argentina is still the Argentine peso. This will result in a

significant reduction of net profit for fiscal year 2001 under US

GAAP, which may even lead to the end result being a loss.

The exchange rate used to convert the net monetary asset position

of Quinsa's Argentine businesses as of December 31, 2001 was 1.7

pesos for each US dollar.

Review of consolidated operations

Highlights for the Fourth Quarter 2001

Consolidated beer volumes declined 5.5% due to the troubled

Argentine economy

Consolidated EBITDA declined to US$ 52.6 million

Soft drink sales volumes in Argentina increased 23.6% principally

as a result of the acquisition of a second Pepsi franchise in the end

of 2000

Net debt decreased US$ 39.8 million to US$ 243.9 million, over

the past 12 months

EPS was US$ 0.169 (?)

(?) see footnote on page nine

Financial review - fourth quarter 2001

Argentina's persistent economic troubles took a turn for the

worse during the fourth quarter 2001. A run on deposits in the

financial system during December led to the imposition of

restrictions on cash withdrawals. This in turn led to significant

declines in consumer spending. In addition to this, widespread

looting and rioting hindered the Company's ability to deliver its

products during the last month of the year. Due to this situation

consolidated beer volumes declined 5.5% to 3,703,000 compared to the

fourth quarter 2000, as strong volume performances in Bolivia and

Paraguay were not sufficient to compensate for volume declines in

Argentina. Consolidated soft drink volumes increased 21.6% over the

same period, due to the acquisition of two franchises in Argentina.

Net sales declined to US$ 272.7 million from US$ 294.0 a year earlier

principally as a result of a decline in average prices. These

declined in Argentina, where beer prices were reduced in December

2000, and in Chile and Paraguay due to the depreciation of the local

currencies against the US dollar. The following is a breakdown of

sales by business:

Gross profit was US$ 124.9 million compared to US$ 138.7 million

a year earlier. This was principally due to the decline in net

revenues. Labor expense reductions, achieved despite the business

acquisitions in December 2000, were not sufficient to compensate for

this decline.

Quinsa's selling and marketing expenses were US$ 72.8 million in

the fourth quarter of 2001, slightly higher than last year. This was

principally the result of increases in promotion expenses,

particularly in Bolivia where we acquired CBN Santa Cruz in December

2000.

The centralization of the Argentine beer and soft drinks

businesses' administrative functions continued to provide reductions

in administrative and general expenses. These were US$ 23.6 million,

compared to US$ 29.5 million a year earlier. Thus administrative

expenses declined from 10.0% to 8.7% of sales despite the business

acquisitions of the past year.

Operating profit was US$ 28.5 million, compared to US$ 38.0

million in the fourth quarter 2000. EBITDA for the three months

declined to US$ 52.6 million from US$ 61.0 million a year earlier.

The principal reasons for these declines were volume and average

price declines, principally in Argentina, which could not be offset

by a 9% reduction in labor expense and other cost reductions.

Net interest expense decreased to US$ 6.2 million from US$ 7.8

million in the fourth quarter of 2000 as a result of the lower

average net debt. Gain from divestiture of investments reflects the

transfer of the Glaciar water brand in 2001 and the sale of the

Paraguayan Coca-Cola franchise (Paresa) in 2000. Translation expense

increased to US$ 9.7 million principally due to the devaluation of

the Argentine peso. Asset impairment for US$ 12.7 million reflects

the write-off of certain assets related to the home and office water

business. Goodwill amortization increased to US$ 6.2 million compared

to US$ 5.5 million last year, due to the acquisitions of CBN Santa

Cruz and Edisa.

Deferred income tax for US$ 31.7 million reflects the tax credit

that resulted from the effect of the devaluation of the Argentine

peso on the Argentine business' bank debt. Consolidated net income

for the fourth quarter 2001 was US$ 17.9 million, or US$ 0.169 per

share, compared to US$ 23.0 million, or US$ 0.214 per share for the

fourth quarter in 2000.

Total shareholders' equity and minority interest increased to US$

846.8 million as of December 31, 2001 from US$ 828.9 million as of

December 31, 2000. The Company's net debt position -- total bank debt

net of cash and short-term investments -- declined to US$ 243.9

million as of December 31, 2001, from US$ 283.7 million a year ago.

Long term debt portion of total bank debt was US$ 157.4 million,

compared to US$ 81.3 million a year ago.

Capital expenditures, excluding acquisitions, reached US$ 15.9

million during the fourth quarter of 2001 and US$ 22.7 million for

the same period in 2000. The principal investments during the quarter

were related to new filling lines for beer and soft drinks in

Argentina.

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03/14/15-09/02
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