Canada, ON: Waterloo Brewing reports C$29.5 mln of net revenue for Q2 of fiscal 2023

Waterloo Brewing Ltd., Ontario's first craft brewery, announced on September 8 financial results for the second quarter of fiscal 2023 which ended on July 31, 2022. Waterloo Brewing reported EBITDA for the second quarter of fiscal 2023 of C$5.1 million, on net revenue of C$29.5 million.

Owner brand sales volume in the quarter grew by 1.4%, while the industry, as a whole, was down by 0.9%. Volumes of the domestic mainstream Laker brand increased by 9.3% versus the prior year, signalling trade-down behaviours within the category as a result of inflationary pressures. The company expects consumers to continue to trade-down, which will benefit the Laker brand, as they continue to feel inflationary pressures. LandShark® also grew by 7.2% which maintained the performance trend in the first quarter and significantly out paced the domestic premium category. Owner brands continued to gain market share at The Beer Store and grocery stores in Ontario.

A few large co-manufacturing customers that supply their own raw materials were impacted by ongoing supply chain delays in the quarter, which resulted in contract volumes either partially lost or shifted to upcoming months. Service revenue decreased by C$4.4 million in the quarter versus the prior representing 93.6% of the overall decline in net revenue.

Gross profit performance declined in the quarter due to lower co-manufacturing volumes, inflationary cost pressures, supply chain challenges and increased operational fixed costs. Waterloo Brewing will continue to evaluate and implement selective product price increases that are expected to partially offset some of the inflationary pressures. Further, Waterloo Brewing expects to gain improved operating efficiencies and labour cost efficiencies as the co-manufacturing volumes increase during the balance of the fiscal year.

"We know our customers are facing significant financial pressures right now. We feel it too, as we continue to experience inflationary cost escalation of our own, and encounter supply chain delays which affects both our co-manufacturing and owner brand manufacturing," said George Croft, President and Chief Executive Officer of Waterloo Brewing. "We want to ensure our customers feel heard and supported, which is why we continue to offer great tasting beer at great prices, continuing to produce the beer of choice for so many Ontarians."

Moving forward, Waterloo Brewing has secured partnerships with Bingemans Oktoberfest, Oktoberfest at Concordia Club and Wilfrid Laurier University Athletics and Recreation. These partnerships will help increase local visibility and align with Waterloo Brewing's commitment to growing its business in its home market. Additionally, the company is preparing for the release of the newest installment of the Waterloo Signature Series Premium Collection, featuring three new fall-inspired beers that will be hitting the LCBO, The Beer Store and select grocery stores this September.

"We have a strong and experienced team that is focused on reaching our goals. I am confident that we will finish this fiscal year strong despite the ongoing challenges," Croft said.

The Board of Directors approved a quarterly dividend of C$0.0304/share, payable November 2, 2022, to shareholders of record as of October 19, 2022. The dividend is classified as an eligible dividend.

08 September, 2022