Swiss Water reported a 10 per cent decline in revenue in its Q2 and half year report for 2023.
Revenue for the second quarter was US$43.4 million, a decline of $5 million compared to the same period in 2022, while revenue for the first half of the year totalled US$94.2 million, an increase of US$5.6 million or 6 per cent.
During the quarter, the Canadian coffee decaffeination company closed operations at its legacy production facility in Burnaby in April, with all production consolidated at the company’s new location in Delta.
“We are pleased to report that Swiss Water’s performance during the second quarter, although softer than recent periods, was in line with our expectations and that all our production assets operated at maximum capacity during the quarter,” says Swiss Water President and CEO Frank Dennis.
The company says the decline of revenue in Q2 was expected and resulted in temporary capacity constraints which negatively impacted volumes while all production was consolidated in Delta before its second new production line was operational.
Swiss Water anticipates commercial production at its Delta location will commence before the end of Q3 2023.
“As we look forward into the balance of 2023, we expect to see a recovery of volumes as we initiate commercial operations on our second production line in Delta, and overall production capacity increases,” says Dennis. “However, the temporary curtailment in volume we absorbed in Q2 will likely lead to lower earnings year-over-year when we report results for the full 2023 fiscal year.”
Volumes shipped to customers decreased by 25 per cent for the quarter and 5 per cent over the first half of the year compared to the same periods last year.
North American sales volumes remained flat during the first half when compared to 2022, despite the temporary capacity constraint.
Swiss Water recorded a net loss of US$0.4 million for the quarter and US$1.1 million for the first half, representing a decrease of US$1.8 million and US$3.9 million, respectively from the 2022 result.
The company says the decrease were due to lower sales volumes, reduced green coffee differential margins, higher finance expenses associated with elevated company borrowings, and one-time incremental depreciation expenses associated with retired assets located at the Company’s vacated facility.
Adjusted EBITDA was US$1.8 million for the quarter and US$6.8 million for the six months, representing a decrease of US$3.5 million and US$2.4 million, respectively from the 2022 result.
