Calgary-based Big Rock Brewery reported a net loss of $0.9 million for the first quarter of 2020 compared to a net loss of $1.7 million in the first quarter of 2019, despite gross revenue declining by $1.0 million (seven per cent) to $12.6 million in the first quarter of 2020.
For the three month period ended March 31, as compared to the same period in 2019:
- sales volumes increased by 4.3 per cent from 34,975 hectolitres to 36,490 hectolitres;
- net revenue increased by 3.5 per cent from $8.6 million to $8.9 million;
- positive earnings before interest, taxes, depreciation and amortization of $0.1 million as compared to negative EBITDA of $1.4 million;
- an operating loss of $0.9 million compared to an operating loss of $2.2 million; and
- cash flow provided from operating activities of $0.2 million, compared to cash flow used in operating activities of $1.2 million.
“Big Rock achieved four per cent growth in sales volumes in Q1 2020 versus Q1 2019 and experienced an eight per cent increase in our gross margins, year-over-year, to 34 per cent for the first quarter,” said Wayne Arsenault, the company’s President and CEO, in a news release, “Although beer sales continue to be under significant pressure from new market entrants and substantial growth in the Ready-to-Drink alcoholic beverage category, I believe our diverse portfolio of product offerings and unique manufacturing footprint allows us to be flexible and competitive in volatile economic environments and ever-changing consumer trends. While a significant portion of our sales volume growth in the quarter was driven by the sales of lower margin products, I am pleased with the momentum our business has been regaining following a difficult 2019.”
During the quarter, the Alberta Gaming, Liquor and Cannabis Commission announced several amendments to its liquor manufacturing policies, to allow manufacturers, including Big Rock, to pursue growth opportunities in the cider and RTD categories without impacting the profitability of their beer businesses, it said.
“I commend the AGLC and the Government of Alberta for making the necessary amendments to provide Alberta manufacturers the opportunity to meaningfully participate in high growth beverage alcohol categories and to pursue growth profitability, beginning with the amendment of the AGLC beer mark-up policy in September of 2019 and most recently with the amendments to the liquor manufacturing policies that limited growth in the cider and RTD categories,” said Arsenault.
“The COVID-19 pandemic has resulted in unprecedented challenges for governments, societies and businesses across Canada and globally. The health and safety of our employees, customers, consumers and communities has been and continues to be our top priority at Big Rock. I am proud of the urgency, agility and resiliency that our employee base has demonstrated and the results of the actions taken to ensure the health and well-being of our people.
“The temporary closures of our retail and restaurant locations in March was an unfortunate but necessary step taken to protect the overall health of society. This pandemic has presented us with new and ever-changing challenges, however, I believe our strong financial position, the breadth of our portfolio of brands, the support of our partners and governments and the commitment of our employees will ultimately demonstrate the resiliency of our company to see through this social and economic crisis. Despite the social distancing and societal restrictions, we will continue to find ways to engage with and support our consumers, customers and communities through this difficult time.”
