Achieved record revenues of
Annualized revenue run rate of NIS 417 million ($149 million)
Adjusted EBITDA2 of NIS 30 million ($11 million)
Generated
Strong balance sheet with over
and financial assets3 of NIS 71 million ($25 million)
Second Quarter and First Half 2023 Key Financial Highlights
- Record revenue of
NIS 209 million ($75 million ) for first half of 2023 andNIS 102 ($36 million ) for the second quarter of 2023, representing YOY growth of over 14% and 8% respectively. - Seventh consecutive half year growth representing an Annualized revenue run rate of
NIS 417 million ($149 million ). - Gross profit of
NIS 68 million ($24 million ), 33% of revenue, for first half of 2023 andNIS 33 million ($12 million ), 32% of revenue for the second quarter. - EBITDA2 of
NIS 30 million ($11 million ) for first half of 2023, representing 14% of revenue andNIS 14 million ($5 million ) for the second quarter. - Generated positive
NIS 35 million ($13 million ) cash from operations in the second quarter and a negativeNIS 17 million ($6 million ) for the first half. - Cash and restricted cash at period end of over
NIS 116 million ($42 million ) and financial assets3 ofNIS 71 million ($25 million ). As the interest rate environment is changing, we are constantly revising our financing structure. During the first half of 2023 we voluntarily repaid loans ofNIS 86 million ($31 million ).
Second Quarter and First Half 2023 Key Operating Highlights
- Sustained market share growth during first half of 2023 due to solid demand for Canndoc's branded products with more than 20 new SKU's successful launches during the period marking InterCure’s leading position in all categories.
- The cultivation operation successfully added 18 new highly demanded strains into its growth cycles. Including new high THC Humbolt cultivars. These are expected to launch during the third and fourth quarters.
- Signing collaboration agreement (in the form of a license agreement) with legendary boxer, entrepreneur, and cannabis advocate Mike Tyson’s premium cannabis brand. Under the terms of the agreement,
InterCure will be granted the right on exclusive basis to cultivate, manufacture, sell, market and distribute all approved products and brands of TYSON 2.0 InIsrael ,Germany ,France ,Australia and theUnited Kingdom .InterCure will also have the right to use the name, the marks and the TYSON 2.0 intellectual property in the said territories. - Announced a voluntary delisting of our ordinary shares from the
Toronto Stock Exchange , due to the fact that maintaining the listing did not offer substantial benefits toInterCure and its shareholders.InterCure's shares continue to be traded on Nasdaq and the Tel Aviv Stock Exchange. - On
August 7, 2023 the minister of health announced a new reform of the Israeli medical cannabis regulations. The new regulations are set to revolutionize the process of prescribing medical cannabis to patients by allowing physicians to prescribe medical cannabis as the first line of treatment (for the first time). In addition, the new regulations will eliminate bottlenecks that have been burdened the industry during the last years. This includes easing cultivation, manufacturing and exportation procedures and regulations. Additionally matching the GMP standards betweenIsrael andEurope and transition to self-regulation similar to the Israeli pharmaceutical industry. The new reform also set a process for the introduction of new formats like vapes, edibles, extracts and other non-flower formats. Furthermore, the reform set a date ofFebruary 2024 to reschedule CBD out of the narcotic law which will allow CBD based products to be sold over the counter.
- The new reform is expected to put into effect within the next coming months and it is expected to increase the number of patients and the demand for medical cannabis products after a long period of stagnation in the Israeli market. As we updated in the previous quarter, financially struggling companies and companies exiting the market continue to liquidize low-to-medium quality inventories at lower prices. This had an impact primarily on our ultra-medical and legacy products.
- On
June 15, 2023 ,Tel Aviv-Jaffa District Court dismissed the lawsuit againstInterCure and the parties agreed on a binding arbitration process in which the amount owed toInterCure and the parties will be determined and paid as part of a full separation process. According to the company's position, Cannolam owesInterCure tens of NIS millions (which are not included in the financial assets mentioned) andInterCure's claim has been submitted to an arbitrator who is expected to rule within the next month. The separation process has a negative effect on the performance of Cannolam that could not be evaluated at this time,InterCure intends to exhaust its full rights against the minority shareholders of Cannolam. Previously, onApril 24, 2023 , a lawsuit was filed againstInterCure inTel Aviv-Jaffa District Court inIsrael by minority shareholders of our subsidiary, Cannolam. The lawsuit relates to disagreements concerning the ongoing management of Cannolam.InterCure has conducted a preliminary review of the claims made by the minority shareholders and find that they lack a valid legal basis.
- Commercial launches of our GMP products in
UK andGermany expected during the fourth quarter of 2023 and the first quarter of 2024 as registration process are undergoing.
"First half of 2023 is another solid performance for
Key Quarterly Financial Highlights – Cannabis Sector
H1-23 | H2-22 | H1-22 | H2-21 | H1-21 | |
Revenues | 208,614 | 206,178 | 182,506 | 141,396 | 78,281 |
Gross Profit (1) | 67,945 | 81,558 | 77,399 | 61,295 | 34,694 |
GP Margin | 33% | 40% | 42% | 43% | 44% |
Adjusted EBITDA(2) | 29,669 | 40,714 | 43,411 | 35,132 | 21,765 |
Adjusted EBITDA(2) Margin | 14% | 20% | 24% | 25% | 28% |
Notes | ||
(1) | Gross profit before effect of fair value. | |
(2) | EBITDA adjusted for changes in the fair value of inventory, share-based payment expense, impairment losses (and gains) on financial assets, non-controlling interest and other expenses (or income). This is a non-IFRS financial measure and does not have a standardized meaning prescribed by IFRS, please see “Non-IFRS Measures” below. |
About
For more information, visit: http://www.intercure.co.
Non-IFRS Measures
This press release makes reference to certain non-IFRS financial measures. Adjusted EBITDA, as defined by
Forward-Looking Statements
This press release may contain forward-looking statements. Forward-looking statements may include, but are not limited to, statements relating to InterCure’s objectives plans and strategies, as well as statements, other than historical facts, that address activities, events or developments that
Contact:
1 All amounts are expressed in New Israeli Shekels (NIS) or Canadian Dollar ($).
2 Means EBITDA for the cannabis sector adjusted for changes in the fair value of inventory, share-based payment expense, impairment losses
(and gains) on financial assets, non-controlling interest and other expenses (or income).
3 Financial assets are mainly debts and loans included in other receivables.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS | ||||
As of | ||||
Condensed Consolidated Interim Statements of Financial Position | ||||
For the 6-months ended on | ||||
NIS in thousands | ||||
2023 | 2022 | |||
(Unaudited) | (Audited) | |||
ASSETS | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 102,653 | 232,589 | ||
Restricted cash | 13,788 | 13,907 | ||
Trade receivables, net | 42,623 | 36,919 | ||
Other receivables | 91,747 | 97,375 | ||
Inventory | 136,443 | 120,133 | ||
Biological assets | 7,058 | 6,365 | ||
Financial assets measured at fair value through profit or loss | 192 | 205 | ||
Total current assets | 394,504 | 507,493 | ||
NON-CURRENT ASSETS: | ||||
Property, plant and equipment and right-of-use asset | 96,970 | 103,133 | ||
284,181 | 284,181 | |||
Deferred tax assets | 23,625 | 20,635 | ||
Financial assets measured at fair value through profit or loss | 2,565 | 2,565 | ||
Investment in associate and loan | 40,000 | 40,000 | ||
Total non-current assets | 447,341 | 450,514 | ||
TOTAL ASSETS | 841,845 | 958,007 | ||
LIABILITIES AND EQUITY | ||||
CURRENT LIABILITIES: | ||||
Short term loan and current maturities | 56,521 | 126,935 | ||
Trade payables | 104,605 | 126,067 | ||
Other payables | 39,524 | 48,397 | ||
Contingent consideration | 6,145 | 10,230 | ||
Short term loan from non-controlling interest | 957 | 1,090 | ||
Total current liabilities | 207,752 | 312,719 | ||
LONG-TERM LIABILITIES: | ||||
Long term loans | 84,067 | 99,684 | ||
Liabilities in respect of employee benefits | 1,079 | 1,025 | ||
Lease liability | 21,295 | 23,102 | ||
Total long-term liabilities | 106,441 | 123,811 | ||
EQUITY: | ||||
Share capital, premium and other reserves | 634,383 | 632,025 | ||
Capital reserve for transactions with controlling shareholder | 2,388 | 2,388 | ||
Receipts on account of shares | 8,541 | 8,541 | ||
Accumulated losses | (136,552) | (141,649) | ||
Equity attributable to owners of the Company | 508,760 | 501,305 | ||
Non-controlling interests | 18,892 | 20,172 | ||
TOTAL EQUITY | 527,652 | 521,477 | ||
TOTAL LIABILITIES AND EQUITY | 841,845 | 958,007 |
Condensed Consolidated Interim Statements of Profit or Loss and Other Comprehensive Income | ||||||
For the 6-months ended on | Year ended | |||||
NIS in thousands | ||||||
2023 | 2022 | 2022 | ||||
(Unaudited) | (Unaudited) | (Audited) | ||||
Revenue | 208,614 | 182,506 | 388,684 | |||
Cost of revenue before fair value adjustments | 140,669 | 105,107 | 229,727 | |||
Gross income before impact of changes in fair value | 67,945 | 77,399 | 158,957 | |||
Unrealized changes to fair value adjustments of biological assets | 4,339 | 7,881 | 13,054 | |||
Loss from fair value changes realized in the current year | 5,316 | 2,270 | 16,928 | |||
Gross Profit | 66,968 | 83,010 | 155,083 | |||
Research and development expenses | 256 | 338 | 632 | |||
General and administrative expenses | 21,856 | 16,958 | 36,082 | |||
Sales and marketing expenses | 27,800 | 24,112 | 56,533 | |||
Other expenses, net | 2,919 | 1,124 | 2,128 | |||
Changes in the fair value of financial assets through profit or loss, net. | 12 | 123 | 174 | |||
Share based payments | 2,358 | 2,441 | 8,907 | |||
Operating Profit | 11,767 | 37,914 | 50,627 | |||
Financing income | 2,252 | 8,805 | 8,170 | |||
Financing expenses | 11,842 | 6,099 | 14,955 | |||
Financing expenses (income), net | 9,590 | (2,706) | 6,785 | |||
Profit before tax on income | 2,177 | 40,620 | 43,842 | |||
Tax (expense) benefit | 1,640 | (10,445) | (93) | |||
Total comprehensive Profit (loss) | 3,817 | 30,175 | 43,749 | |||
Profit (loss) attributable to: | ||||||
Owners of the Company | 5,097 | 29,012 | 44,819 | |||
Non-controlling interests | (1,280) | 1,163 | (1,070) | |||
Total | 3,817 | 30,175 | 43,749 | |||
Interest / Financing expense (income) net | 9,590 | (2,706) | 6,785 | |||
Tax expenses (benefit) | (1,640) | 10,445 | 93 | |||
Depreciation and amortization | 6,442 | 4,629 | 2,354 | |||
EBITDA | 18,209 | 42,543 | 52,981 | |||
Share-based payment expenses | 2,358 | 2,441 | (2,004) | |||
Other expenses (income), net | 2,919 | 1124 | 2128 | |||
Impairment losses and (gains) on financial assets through profit and loss | 12 | 123 | 174 | |||
Fair value adjustment to inventory | 977 | (5611) | (3527) | |||
Adjusted EBITDA | 24,475 | 40,620 | 49,752 | |||
Earnings per share | ||||||
Basic earnings | 0.11 | 0.64 | 0.99 | |||
Diluted earnings | 0.11 | 0.64 | 0.99 | |||
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/9a1af83a-5314-467a-880c-5d2311ec3760
Half Year Revenues 2020 to 2023
Half Year Revenues 2020 to 2023
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