Bacardi Ltd. reported a 20 percent drop in net earnings last year due to declining sales of Bacardi Breezers and other ready-to-drink beverages plus a series of onetime charges, according to the Miami Herald.

The Herald based its story on a copy of the annual report, which was sent to all shareholders in advance of the annual meeting, to be held on June 24 in Bermuda.

Bacardi?s bottom-line results for the fiscal year ending March 31 would have been worse if not for the financial benefit the company received from the strong value of the euro against the dollar and the sale of two non-core brands.

But the newspaper quoted chairman Rub?n Rodr?guez saying that that the decline in net earnings did not present a fair picture of the company?s health, which includes continued growth among its core brands of Bacardi rum, Bombay Sapphire gin and Martini vermouth. The only major brand not showing growth was Dewar?s Scotch, which reported a slight one percent sales decline.

??If you have a 20 percent decline because your core brands are collapsing, then you would have a problem,?? said Rodr?guez, who agreed to discuss the results after The Herald obtained a copy of the financial report. ?We decided to make decisions that we believe will make the company more efficient in the long run. We don?t believe in cutting advertising to improve the bottom line.??

Due largely to the value of the euro, Bacardi?s annual sales for the year hit a record of just under $3.3 billion, compared with $3.1 billion the previous year. But sales of its major group brands declined from 80.7 million cases to 76.5 million cases.

Net earnings also declined, to $331 million, compared with $417 million the previous year. Yet the company still will maintain a dividend to shareholders of $6.56 per share. ??Our cash flow from the core business is very healthy and sound,?? Rodr?guez told the Herald. A big part of the decline came because Bacardi had to write off $36.9 million because it ended its interest-rate swap, a practice used to hedge against rising interest rates.

It also recorded $52.3 million in asset write-down and production-severance costs. And it spent $20.5 million on the implementation of a computer system designed to better measure the cost of sales.