Big Rock Brewery (BR) Q2 2024 earnings summary

Executive summary

• Q2 net revenue fell 2.8% YoY and Adjusted EBITDA declined to $0.2m; net income was $0.2m versus a $0.3m loss, despite an operating loss of $0.7m.

• H1 net revenue decreased 9.6% YoY to $20.9m, while net loss widened to $2.9m and Adjusted EBITDA moved to a $1.3m loss.

• Cooler spring weather, Calgary water restrictions and reduced co-packing volumes pressured operations; a new three-year contract and operational changes are intended to support recovery.

Financial highlights

• Q2 net revenue was $12.344m versus $12.702m; operating loss was $0.667m versus $0.043m operating income, and net income was $0.220m versus a $0.340m loss.

• Q2 Adjusted EBITDA was $0.165m versus $1.188m; H1 Adjusted EBITDA was a loss of $1.308m versus $1.889m income.

• H1 net revenue was $20.926m versus $23.153m; operating loss was $2.966m versus $0.101m, and net loss was $2.853m versus $0.595m.

• Gross product revenue was $15.792m in Q2 versus $17.018m; H1 was $27.080m versus $30.657m.

Outlook and guidance

• A new three-year strategic-partner contract is expected to generate 50,000 hl or more annually, with volumes backstopping sales from Q3 2024 and replacing lost co-packing volumes.

• Management expects continued product launches through the rest of 2024 and says operational realignment, new volumes and capital investments support confidence in improved future financial results.

• Management assumptions include 2025 co-packing volumes returning to or exceeding 2022 levels and ongoing growth in the non-alcoholic market; actual results may differ materially.