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  • Swiss Water Decaffeinated Coffee Inc. (SWP) brewed strong business in the first half of this year, especially in Q2
  • The company earned $48.4 million in revenue in Q2 2022, an increase of 68 per cent or $19.6 million when compared to the same period in 2021
  • A combination of strong volume growth, increased green coffee differential margin, and high-capacity production assets drove an increase in income of $1.2 and $2.7 million respectively, to $1.5 million and $2.8 million for the three and six months ended June 30, 2022, compared to the same periods in 2021
  • Q2 and year-to-date EBITDA was $5.3 million and $9.2 million, an increase of 117 per cent or $2.9 million and 107 per cent or $4.8 million respectively
  • Swiss Water Decaffeinated Coffee (SWP) was up 10.00 per cent trading at C$2.97 a share as of 3:35 pm ET

Swiss Water Decaffeinated Coffee Inc. (SWP) brewed strong business in the first half of this year, especially in Q2.

The Vancouver, BC-based company earned $48.4 million in revenue in Q2 2022, an increase of 68 per cent or $19.6 million when compared to the same period in 2021. Year-to-date revenue also grew strongly and was $86.8 million, an increase of 59 per cent or $32.3 million.

Quarterly and year-to-date processing volumes increased by 40 per cent and 32 per cent respectively, compared to the same periods last year, driven by a combination of new customer acquisition and organic growth with existing customers.

North American business growth accelerated with Q2 volumes up by 34 per cent compared to Q2 of 2021 and up by 27 per cent year-to-date, compared to the same period in 2021. International markets also grew, with volumes up by 68 per cent and 51 per cent for the three and six months, respectively.

A combination of solid volume growth increased green coffee differential margin, and high-capacity production assets drove an increase in income of $1.2 and $2.7 million, respectively, to $1.5 million and $2.8 million for the three and six months ended June 30, 2022, compared to the same periods in 2021.

Q2 and year-to-date adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $5.3 million and $9.2 million, an increase of 117 per cent or $2.9 million and 107 per cent or $4.8 million, respectively.

Total processing volumes increased by 40 per cent in Q2 and by 32 per cent for the year-to-date when compared to the same periods last year.

Swiss Water’s President and CEO, Frank Dennis stated that volumes, revenues and profitability have all exceeded expectations, leading to a stronger than expected first half of the year.

“Total second quarter volume grew by 40 per cent, and our biggest market, North America, maintained strong double-digit growth during this period. Our existing customers are experiencing strong growth in demand for their chemical free decaf offerings and additionally, we have benefited from increased shipments to a number of new out-of-home customers in North America. We are seeing very good evidence in the marketplace that our competitors’ methylene chloride decaffeination is declining in preference by roasters and consumers in favour of chemical free processes like ours. Furthermore, we are excited to share that our capacity utilization rates remain high and are continuing to drive improved profitability. This is helping us manage higher than expected and persistent inflationary pressure.”

He admitted that the second half of 2022 indicates a strong order book ahead and the team is optimistic that, despite emerging macroeconomic risks, they will continue to see favourable trading conditions in key markets.

“On a more cautionary note, we are continuing to experience delays in coffee deliveries as supply chain bottlenecks persist. Furthermore, the continuation of very high coffee futures prices has resulted in a significant increase in our working capital and liquidity needs. We will pay close attention to these emerging risks and increasing costs and expect that further pricing actions and other mitigation efforts will likely be required.”

Swiss Water Decaffeinated Coffee Inc. (SWP) is a specialty coffee company that offers green coffee decaffeination. It employs the proprietary Swiss Water Process to decaffeinate green coffee without using chemicals, leveraging science-based systems and controls to produce coffee.

Swiss Water Decaffeinated Coffee (SWP) was up 10.00 per cent trading at C$2.97 a share as of 3:35 pm ET.


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