Swiss Water Decaffeinated Coffee (SWP) Q2 2024 earnings summary

Executive summary

• Strong and growing demand for chemical-free decaffeinated coffee drove Q2 2024 volume growth and profitability, with a 12% increase in sales volumes and significant production efficiencies following consolidation at the Delta, BC facility.

• All production now consolidated at the Delta facility, enabling further operational efficiencies and cost savings.

Financial highlights

• Q2 2024 revenue was CAD 43.4 million, unchanged year-over-year; first half revenue was CAD 82.1 million, down CAD 10.3 million due to normalization of order patterns.

• Q2 gross profit rose to CAD 7.7 million (18% margin), up CAD 4.3 million; first half gross profit was CAD 12.8 million (16% margin), up 54% year-over-year.

• Q2 net income was CAD 947,000, reversing a net loss of CAD 371,000 last year; first half net income was CAD 47,000, up from a net loss of CAD 1.1 million.

• Q2 Adjusted EBITDA was CAD 4.5 million, up CAD 2.7 million; first half Adjusted EBITDA was CAD 7.3 million, up CAD 500,000.

• Q2 cost of sales decreased by 11% to CAD 35.7 million; first half cost of sales down 18% to CAD 69.3 million.

Outlook and guidance

• Optimism for continued volume growth and improved profitability in 2024, supported by strong liquidity and operational consolidation.

• Sufficient production capacity for current and medium-term growth; ongoing optimization and targeted investments planned.

• Elevated coffee futures prices may negatively impact demand and growth in 2024 if high prices persist.