Swiss Water Decaffeinated Coffee Inc. Reports Strong 1Q25 Results Amid Market Uncertainty and Price Volatility

Swiss Water Decaffeinated Coffee Inc. reported a 6% increase in volume sales and a 61% rise in revenue for 1Q25 despite economic and industry challenges. The company's natural decaffeination process, inventory building strategy, efficiency measures, and expansion into new markets contributed to the growth. However, commodity prices remain volatile, and the company is subject to tariffs on its exports to the US.

VANCOUVER, British Columbia, May 10, 2025 — Swiss Water Decaffeinated Coffee Inc. (TSX:SWP) reported a robust performance for the first quarter of 2025, showcasing a 6% increase in volume sales and a 61% rise in revenue compared to the same period in 2024. Despite economic and industry challenges, the company's natural decaffeination process, inventory building strategy, efficiency measures, and expansion into new markets contributed significantly to this growth.

Revenue for the three months ended March 31, 2025, reached $62.3 million, a substantial increase of $23.5 million or 61% over the same period in 2024. Gross profit rose by $2.2 million or 42% to $7.3 million, primarily driven by revenue growth. The company's gross margin percentage for the quarter was 12%, down slightly from 13% in Q1 2024, due to the reversal of an inventory provision in Q1 2024.

Operating expenses decreased by $362, or 10%, to $3,389, while operating income increased by $2,534, or 186%, to $3,898. Net income after taxes for the period was $0.5 million, compared to a net loss of $0.9 million for the same period in 2024. Adjusted EBITDA was $2.0 million, a decrease of $780 or 28% from Q1 2024.

CEO Frank Dennis commented, "We entered 2025 with solid momentum, delivering volume growth and steady execution despite continued volatility in the coffee market. Customer demand remained healthy, and we added new accounts while maintaining strong operational performance across our platform. As expected in an inverted market, some of our hedge positions resulted in timing-related losses as contracts were rolled forward and negatively impacted Adjusted EBITDA. However, revised pricing initiatives are in place, and we expect to fully recover any incremental hedge losses incurred this year. These changes reflect the mechanics of managing risk in a complex pricing environment. We also made a strategic decision to increase inventory levels to support anticipated volume and ensure product availability for our customers."

The NY’C’ coffee futures price for Arabica coffee remained volatile during Q1 2025, peaking at US$4.25/lb in February. The average price for the quarter was US$3.73/lb, compared to an average of US$1.90/lb in Q1 2024, an increase of 97%. The higher prices and backwardated coffee market may result in a softening of consumer demand and volumes shipped to roasters. Additionally, the US administration signaled its intention to impose blanket tariffs on Mexican and Canadian imports. Swiss Water’s decaffeination process has been formally classified by US customs as “non-transformational,” allowing processed beans to retain the original country-of-origin status for tariff purposes. As a result, Swiss Water’s exports to the US were not subject to tariffs during the three months ended March 31, 2025.

Looking ahead, while Swiss Water expects some ongoing variability in ordering patterns due to price sensitivity, tariffs, and broader macroeconomic pressures, the company remains confident in the strength of its business and its ability to serve customers reliably in a complex market.

A conference call to discuss Swiss Water’s recent financial results will be held on Thursday, May 8, 2025, at 1:00 pm Pacific (4:00 pm Eastern). To access the conference call, please dial: 1-888-506-0062 (toll-free) or 1-973-528-0011 (international); listeners will be prompted to provide an access code: 254033. A replay will be available through May 22, 2025, at 1-877-481-4010 (toll-free) or 1-919-882-2331 (international); replay passcode: 52370.

For more detailed information, please refer to the Company’s Management Discussion and Analysis filed on SEDAR+ and Swiss Water’s website (investor.swisswater.com).

References:
[1] https://www.taiwannews.com.tw/en/news/6104911