The Canadian decaffeinated coffee company received higher-than-usual volumes in its first quarter as customers prepare for a temporary disruption to supply as Swiss Water switches production site
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Swiss Water reported volumes increased 21% compared to the same quarter in 2022 | Photo credit: Swiss Water
Swiss Water has achieved a record for quarterly revenues as customers sought to stock inventory ahead of the decaffeinated coffee company’s transition to a new production facility.
First quarter revenue grew 28% to CA$49m ($36m) in the three months ended 31 March 2023, which led to adjusted EBITDA of CA$5m ($3.7m) for the period.
Swiss Water reported volumes increased 21% compared to the same quarter in 2022, with its North American business recording 35% volume growth.
The rise in volume was primarily driven by customers placing orders earlier in the year than usual ahead of Swiss Water’s Burnaby facility shutdown and a three-month period of reduced available capacity as the company transitions to its new Delta production site.
As a result of the move, Swiss Water reported a first quarter net loss of CA$0.7m ($520,000), primarily due to a $2.1m ($1.5m) one-time increase in depreciation expense associated with the ‘write down of non-salvaged assets’ at the Burnaby facility.
“We are pleased to report that the strong performance we achieved during 2022 carried forward into the first quarter of this year. The strong volume result during the quarter was driven by many of our customers moving orders ahead in the year to manage their inventory needs ahead of the transition from our Burnaby facility to our new second production line in Delta. As a result of our high volumes, revenues and adjusted EBITDA both hit record levels,” said Frank Dennis, President and CEO, Swiss Water.
The transition ‘marks the culmination of a decade long project to relocate, modernise and expand the capacity of Swiss Water’s production assets’, Dennis added.
Temporary lower production due to the facility transition is expected to lead to lower year-over-year earnings for Swiss Water’s full 2023 fiscal year.
The Vancouver-based decaffeinated coffee company achieved 41% year-on-year revenue growth to reach CA$176m ($129m) for the 12 months ended 31 December 2022.