While Swiss Water‘s sales more than increased by more than half to CA$67.7 million in the subsequent quarter, its profits shrank. Revenue drivers behind the 56 percent jump came mostly from strong customer demand and steady orders from longtime roasters. Even though the firm’s processing volumes only nudged up two percent, the mix included more lower-margin green coffee, which changed the profit picture.
Gross profit dropped 32 percent to CA$5.2 million, and adjusted EBITDA slid 59 percent to roughly CA$1.8 million. Management explained that product mix shifted, costlier maintenance came forward, and hedge losses bit part of the margin. Gross margin fell from 18 percent a year ago to eight percent now. A recent $2.9 million debt payment in the first quarter signals ongoing commitment to balance-sheet discipline.
Currency also worked against the company. A softer U.S. dollar and an inverted commodity market hurt rolling hedge gains. Still, the firm’s risk-hedging program shielded core operations from direct swings in bean prices, and leaders call the impact temporary.
To shore up finances, Swiss Water renewed and expanded its credit line to CA$80 million, adding breathing room. It also struck a deal to buy back warrants held by Mill Road Capital and continued paying down construction debt. These moves enhance balance sheet strength for future expansion plans.
CEO Frank Dennis underlined that net income stayed stable for the initial half of 2025 despite higher volumes. He voiced confidence that margin pressures will ease once hedge effects reverse and production costs settle. Management believes the premium decaf segment, which the company serves through its chemical-free Swiss Water Process, will keep expanding.
Located in British Columbia, Swiss Water specializes in decaffeinated and specialty green coffees. The firm leans on long-standing customer relationships and a focus on quality to stay competitive.
With improved liquidity and a flexible capital structure, the company aims to ride expected market recovery while holding onto its loyal customer base.
