- Shares in Swiss Water Decaffeinated Coffee (SWP) have risen more than 18 per cent today following news of a successful second quarter
- The company reported a marginal increase in sales, from C$24.4 million in the same period of 2019 to $26.4 million this year
- Gross profit also increased to $5.2 million compared to $4.1 million last year
- The positive results come despite a two per cent drop in volumes during the quarter, primarily due to COVID-19
- Swiss Water Decaffeinated Coffee (SWP) is currently up 18.32 per cent and is trading at $3.10 per share
Shares in Swiss Water Decaffeinated Coffee (SWP) have risen more than 18 per cent today following news of a successful second quarter.
The company reported a marginal increase in sales for the period ending June 30, 2020, up from C$24.4 million in the same period of 2019 to $26.4 million this year.
This came despite a two per cent decrease in volumes, which was offset by the positive effects of customer mix, higher coffee quality differentials and a higher average US dollar exchange rate.
Gross profit for the period also increased by approximately $1 million to a total of $5.2 million, compared to $4.1 million last year.
Swiss Water said the improvement was due to a number of factors, including positive changes in the company’s sales mix, margin gains due to higher coffee quality differentials, enhanced supply chain efficiencies and lower natural gas prices.
However, any further increases were partially offset by the decrease in volumes shipped during the first half of this year and by higher annual inflationary labour costs.
In line with previous quarters, the US continued to represent Swiss Water’s largest market, accounting for approximately 52 per cent of sales. 27 per cent of sales went to Canada, while the remaining 21 per cent went to other countries.
Frank Dennis, President and CEO of Swiss Water Decaffeinated Coffee, said he is pleased to report that volumes rebounded better than anticipated during the quarter.
“Subsequent to the end of the second quarter, the commissioning of the first new production line at our Delta, British Columbia facility was completed. We expect to begin delivering commercial grade coffee from Delta during the third quarter.
“Based on engineering reports from a third-party engineering firm, when both are completed, we expect the two new lines in Delta together will have a targeted end capacity at least 40 per cent greater than the current Burnaby facility,” he added.
Frank also noted that, despite the positive trends seen during the second quarter, the continuing negative impacts of the COVID-19 pandemic make the company’s short-term outlook “impossible to predict with any surety.”
Swiss Water Decaffeinated Coffee (SWP) is currently up 18.32 per cent and is trading at $3.10 per share at 12:22pm EDT.