CANADA: Big Rock sales fall hits income
Big Rock Brewery Income Trust has see a fall in second quarter net income as revenues fell due to changing sales mix and a one off charge.
The company said that net income for the for the quarter ending June 30, 2005 was C$1,695,494 compared to C$2,213,802 for the three months ended June 30, 2004.
"The decrease is largely due to the reduction in net revenue caused by a changing sales mix year-over-year and a non-cash C$258,660 stock based compensation charge this quarter," a statement said.
Year-to-date net income is down by C$940,334 from C$3,637,253 last year to C$2,696,919 this year.
The company said that despite a very cool and very wet spring in Alberta, Big Rock's major market still experienced 11% volume growth during the quarter ended June 30, 2005 compared to the same quarter last year. This was due primarily to an increase in private labels produced by Big Rock.
Volume in British Columbia, Big Rock's second largest market, was down significantly from the same quarter last year due to inclement spring weather and the repositioning of Big Rock's value brands at higher price levels.
Overall, sales volume was down by 1% (795 hl) from 57,050hl for the three months ended June 30, 2004 to 56,256hl for the three months ended June 30, 2005. Year-to-date volume year-over-year was down 3% from 101,114hl to 98,081hl.
For the three months ended June 30, 2005, net sales revenue decreased by C$744,542 from C$11,575,836 last year to C$10,831,294, a 6% decrease. The volume decrease together with a changing sales mix towards value and private label sales comprise this decrease. Net revenue per hectoliter decreased by C$10 resulting from the changing sales mix and competitive pricing.
"The industry wide growth of the value priced beer segment has been significant this year. Big Rock is well positioned to aggressively compete in this segment however average revenue per hectoliter will fall as the proportion of Big Rock's value priced brands grows. Year-to-date net revenue declined from C$19,861,732 to C$18,779,834 a $1,081,898 (5%) decrease.," the statement said.
Sectors: Beer & cider
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