- Diamond Estates Wines & Spirits (DWS) reports Q2 2022 financial results
- Revenue for Q2 2022 was $7.1 million, a decrease of $0.1 million from Q2 2021 revenue of $7.2 million, due to softness experienced in the months of July and August
- The softness in the agency business was offset by increased sales within the winery division
- Gross margin for Q2 2022 was $2.7 million, a decrease of $0.4 million from $3.1 million in Q2 2021
- While further restrictions were lifted during Q2 2022, it expects sales to continue to be impacted by COVID-19 measures especially with domestic and international travel
- Diamond Estates Wines & Spirits (DWS) is down 3.80 per cent, trading at C$1.52 at 12:09 pm EST
Diamond Estates Wines & Spirits Inc. (DWS) has released its financial results for the three and six months ended September 30, 2021.
Revenue for Q2 2022 was $7.1 million, a decrease of $0.1 million from Q2 2021 revenue of $7.2 million, due to softness experienced in the months of July and August in the agency business from a combination of delayed orders by provincial retailers in commission markets and supply chain delays in Western Canada.
The softness in the agency business was offset by increased sales within the winery division. The elimination of some of the COVID pandemic restrictions resulted in the reopening of many on-premise and private retail accounts nationally in addition to the resumption of export orders from overseas distributors.
The gross margin for Q2 2022 was $2.7 million, a decrease of $0.4 million from $3.1 million in Q2 2021, and gross margin as a percentage of revenue was 38.1 per cent for Q2 2022 compared to 43.0 per cent in Q2 2021.
The shift in sales mix from commission to buy/sell markets and supply constraints in the agency business resulted in the gross margin in the agency business decreasing from 44.0 per cent YTD 2022 to 38.0 per cent YTD 2022.
EBITDA was $(0.2) million in Q2 2022, a decrease of $1.0 million from $0.8 million in Q2 2021, largely a result of the decrease in gross margin and an increase in employee compensation of $0.4 million.
The increase in employee compensation is directly attributable to the reduction in government relief funding received this year versus last year; and net loss was $1.0 million, compared to a net loss of $0.4 million in Q2 2021.
It has experienced increased sales in the winery business but also some softness in the agency business in Q2 FY2022.
The strength in the winery business persisted throughout the second quarter even with the sales continuing to be impacted by government-mandated restrictions.
While further restrictions were lifted during Q2 2022, it expects sales to continue to be impacted by COVID-19 measures especially with domestic and international travel and supply disruptions.
The recent events exhibit confidence and strength in the company and also set the foundation for future organic growth.
“While the pandemic and the government restrictions continue to impact our business and customers in unusual and unprecedented ways, we do see encouraging signs that these factors are beginning to wane as the pandemic eases,” stated Murray Souter, President and CEO of Diamond Estates.
“Our winery business has begun to return to more normal volumes particularly in our on-premise business as restaurant restrictions are easing. Additionally, we are starting to see an increase in our export business as other counties ease their restrictions,” added Souter.
Diamond Estates Wines and Spirits Inc. is a producer of high-quality wines and a sales agent for over 120 beverage alcohol brands across Canada.
It operates two wineries, one in Ontario and one in British Columbia, that produce predominantly VQA wines under such well-known brand names as 20 Bees, Creekside, EastDell, Lakeview Cellars, Queenston Mile, Fresh, Seasons, Serenity, and Backyard Vineyards.
Diamond Estates Wines & Spirits (DWS) is down 3.80 per cent, trading at C$1.52 at 12:09 pm EST.
