InterCure Ltd. (NASDAQ: INCR) (TSX: INCR.U) (TASE: INCR) (dba
Canndoc)(“
InterCure” or the
“
Company”) is pleased to announce its financial
and operating results for the first quarter ended March
31, 2023.
All amounts are expressed in New Israeli Shekels
(NIS) or Canadian dollars ($), unless otherwise noted.
First Quarter 2023 Key Financial &
Operating Highlights
- Quarterly
revenue of $40 million (NIS 106 million), representing 22% growth
YoY and up 1% sequentially compared to the prior quarter.
- Annualized
Revenue Run Rate of $159 million (NIS 425 million).
- Increased our
leadership market share due to solid demand for Canndoc’s branded
products.
- Revenue growth
expected to continue through out 2023.
- Gross profit of
$13 million (NIS 35 million), gross margin of 33% compared to 41%
(YoY) as a result of market conditions. During the quarter,
financially struggling companies and companies exiting the market
continue to liquidise low-to-medium quality inventories at lower
prices. This had an impact primarily on our ultra-medical and
legacy products, while the prices for our top selling high quality
products remained stable. In addition, none of our 7 in-process
pharmacies received license to dispense medical cannabis mainly due
to police personal shortage, we expect all 7 pharmacies which are
still in-process will be licensed by year end.
- Adjusted EBITDA
for the first quarter was $6 million (NIS 16 million).
- Cash and
restricted cash (consolidated) at quarter end of $45 million (NIS
120 million) and Net current assets of over $72 million. As
interest rate environment is changing, we are constantly revising
our financing structure. During the first quarter of 2023 we
voluntarily repayed loans of $24 million (NIS 64 million). In
addition to the cash position we have unutilized credit lines and
financial assets of over $41 million (NIS 110 million).
- Expansion of
our trade houses operations positioning Pharmazone as the biggest
medical cannabis dedicated trade house in Israel.
- Announced the
termination of the Better acquisition agreement, which has led us
subsequently to file a lawsuit to recover the funds loaned in
connection with the merger agreement.
- Successfully
completed export of our GMP products to Intercure’s EU hub,
preparing for commercial launches of our products in UK and
Germany.
Subsequent Quarter 2023
Highlights
- Signed an
initial collaboration agreement with legendary boxer, entrepreneur
and cannabis advocate Mike Tyson’s premium cannabis brand. The
partnership will grant an exclusive distribution license to
cultivate, manufacture, sell, market, and distribute all approved
products and brands of TYSON 2.0 in Israel, Australia, United
Kingdom, Germany and other EU countries such as Switzerland.
InterCure will also have the right to use the name, the marks and
the TYSON 2.0 intellectual property in these territories.
“I am proud of our team delivering another
consecutive quarter of record revenues with strong operating
performance demonstrating our leadership position,” said
InterCure CEO Alexander Rabinovich, adding, “We
continued to execute on our international expansion plans building
our footprint organically and exploring strategic acquisitions in
key markets, to meet the solid demand for our high-quality branded
products. We expect 2023 to be another millstone year for
Intercure, solidifying our leadership position in the
pharmaceutical cannabis market.”
(1) Means 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);
Key Q1 2023 Financial Highlights
– Cannabis Sector
(In thousands NIS)
|
Q1 2023 |
Q1 2022 |
Revenues |
106,175 |
87,229 |
Gross Profit (1) |
35,123 |
35,857 |
Adjusted EBITDA (2) |
15,806 |
21,298 |
|
Q1-23 |
Q4-22 |
Q3-22 |
Q2-22 |
Q1-22 |
Q4-21 |
Q3-21 |
Revenues |
106,175 |
105,606 |
100,572 |
95,277 |
87,229 |
79,701 |
61,695 |
Gross Profit (1) |
35,123 |
37,484 |
44,074 |
41,542 |
35,857 |
36,613 |
24,682 |
GP Margin |
33% |
35% |
44% |
44% |
41% |
46% |
40% |
Adjusted EBITDA(2) |
15,806 |
18,527 |
22,187 |
22,113 |
21,298 |
21,091 |
14,041 |
Adjusted EBITDA(2) Margin |
15% |
18% |
22% |
23% |
24% |
26% |
23% |
___________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.
|
For the 3-months ended on March 31 |
|
2023 |
2022 |
Revenues |
106,175 |
87,229 |
Gross profit before effect of fair value |
35,123 |
35,857 |
Gross profit after effect of fair value |
34,327 |
39,384 |
Research and development expenses |
(157) |
(162) |
General and administrative expenses |
(11,210) |
(8,308) |
Share based payments |
(1,409) |
(851) |
Marketing and selling expenses |
(13,570) |
(9,830) |
Impairment gains and (losses) on financial assets through profit or
loss |
4 |
(50) |
Other income (expenses), net |
(2,038) |
(195) |
Consolidated operating profit |
5,947 |
19,988 |
Comprehensive income |
92 |
14,699 |
Interest / Financing expenses (income) net |
4,173 |
581 |
Tax expenses |
1,682 |
4,708 |
Depreciation and amortization |
2,925 |
2,354 |
EBITDA |
8,872 |
22,342 |
Share-based payment expenses |
1,409 |
851 |
Other expenses (income), net |
2,038 |
195 |
Impairment losses and (gains) on financial assets through profit
and loss |
(4) |
50 |
Fair value adjustment to inventory |
796 |
(3,527) |
Adjusted EBITDA |
13,111 |
19,911 |
Basic earnings (loss) per share |
0.005 |
0.38 |
Diluted earnings per share |
0.005 |
0.36 |
Consolidated Financial Statements and
Management’s Discussion and Analysis
The publication of InterCure’s audited financial
statements and accompanying notes for the quarter ended March
31, 2023 and related management’s discussion and analysis of
financial condition and results of operations and analysis of
financial condition and results of operations
(“MD&A”) are available under the Company’s
profile on SEDAR.
About InterCure (dba
Canndoc)
InterCure (dba Canndoc) (NASDAQ: INCR) (TSX:
INCR.U) (TASE: INCR) is the leading, profitable, and fastest
growing cannabis company outside of North America. Canndoc, a
wholly owned subsidiary of InterCure, is Israel’s largest licensed
cannabis producer and one of the first to offer Good Manufacturing
Practices (GMP) certified and pharmaceutical-grade medical cannabis
products. InterCure leverages its international market leading
distribution network, best in class international partnerships and
a high-margin vertically integrated “seed-to-sale” model to lead
the fastest growing cannabis global market outside of North
America.
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
InterCure, means earnings before interest, income taxes,
depreciation, and amortization, 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 measure is not a recognized measure
under IFRS, does not have a standardized meaning prescribed by IFRS
and is therefore unlikely to be comparable to similar measures
presented by other companies. InterCure’s method of calculating
this measure may differ from methods used by other entities and
accordingly, this measure may not be comparable to similarly titled
measured used by other entities or in other jurisdictions.
InterCure uses this measure because it believes it provides useful
information to both management and investors with respect to the
operating and financial performance of the company. A
reconciliation of Adjusted EBITDA to an IFRS measure (revenue),
which is incorporated by reference to this press release, is
available in InterCure’s MD&A for the period under the heading
“Results of Operation”, available under the
Company’s profile on SEDAR at www.sedar.com.
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 InterCure
intends, expects, projects, believes or anticipates will or may
occur in the future. These statements are often characterized by
terminology such as “believes,” “hopes,” “may,” “anticipates,”
“should,” “intends,” “plans,” “will,” “expects,” “estimates,”
“projects,” “positioned,” “strategy” and similar expressions and
are based on assumptions and assessments made in light of
management’s experience and perception of historical trends,
current conditions, expected future developments and other factors
believed to be appropriate. Forward-looking statements are not
guarantees of future performance and are subject to risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in such statements. Many factors
could cause InterCure’s actual activities or results to differ
materially from the activities and results anticipated in
forward-looking statements, including, but not limited to, the
following: the Company’s future revenue growth and profitability,
the success of its global expansion plans, its continued growth,
the expected operations, financial results business strategy,
competitive strengths, goals and expansion and growth plans,
expansion strategy to major markets worldwide, the impact of the
COVID-19 pandemic and the war in Ukraine, macro economic factors
(including inflation) and uncertainty created as a result of the
socio-political situation in Israel. Forward-looking information is
based on a number of assumptions and is subject to a number of
risks and uncertainties, many of which are beyond InterCure’s
control, which could cause actual results and events to differ
materially from those that are disclosed in or implied by such
forward-looking information. Such risks and uncertainties include,
but are not limited to: changes in general economic, business and
political conditions, changes in applicable laws, the U.S. and
Canadian regulatory landscapes and enforcement related to cannabis,
changes in public opinion and perception of the cannabis industry,
reliance on the expertise and judgment of senior management, as
well as the factors discussed under the heading “Risk Factors” in
InterCure’s Annual Information Form for the year ended December
31, 2022, which is available on SEDAR at www.sedar.com, and
under the heading “Risk Factors” and “Cautionary Note Regarding
Forward-Looking Statements” in the registration statement on Form
20-F, filed with the Securities Exchange Commission on May
1, 2023. InterCure undertakes no obligation to update such
forward-looking information, whether as a result of new
information, future events or otherwise, except as expressly
required by applicable law.
Due to the participation of the
Company’s executives at the Cowen-CMS European Cannabis Conference
in Berlin, the Company will not hold an earnings call. Investors
and company representatives are welcome to schedule a
meeting.
Contact:InterCure Ltd.Amos
Cohen, Chief Financial Officer
Amos@intercure.co
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/e1411832-9dfe-4c93-8328-250f346ecc5a
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