This Pot Stock Significantly Shrinks Its Quarterly Loss, Sees 28% YoY Revenue Growth, Projects Positive Free Cashflow For Full Year

Canadian cannabis company Rubicon Organics Inc. ROMJ ROMJF reported Wednesday its financial results for the second quarter ended June 30, 2023, revealing a record net revenue of CA$11.3 million ($8.37 million), up by 28% year-over-year and also sequentially.

“I'm pleased to share that Rubicon Organics has achieved another record quarter of net revenue, a 28% increase year-on-year, delivering our fifth consecutive quarter of positive Adjusted EBITDA and fourth consecutive quarter of positive operating cashflow,” stated Margaret Brodie, interim CEO and CFO. “Our focus remains on further establishing a leading presence in the premium cannabis market and, through extensive due diligence, to work with high-quality partners to complement our own premium production to achieve our long-term strategy. We expect to see the ramping up of supply from these partnerships to leverage the strong demand of our brands beginning in Q4 2023.”

Q2 2023 Financial Highlights:

• Gross profit was of CA$3.99 million, compared to $3.18 million in the second quarter of 2022. 

• Net loss amounted to CA$113,838, significantly lower than a net loss of $1.23 million in the same period last year.

• Achieved fifth consecutive quarter of Adjusted EBITDA profitability with CA$1.8 million and CA$1.9 million for the three and six months ended June 30, 2023, an increase of CA$1.5 million and CA$3.2 million compared to the comparative periods in 2022.

• 22% growth in cash balance from CA$7.6 million on March 31, 2023, to CA$9.3 million.

• Achieved fourth consecutive quarter of operating cashflow positive of CA$2.4 million and CA$2.6 million for the three and six months ended June 30, 2023, an increase of $3.0 million and CA$4.8 million compared to the prior periods in 2022.

• The company had working capital of CA$19.7 million as of June 30, 2023, of which CA$9.3 million of cash on hand and CA$4.7 million in accounts receivable.

Outlook

Rubicon Organics has set out four key priorities for 2023:

• Optimize yield and cultivation at its Delta Facility; 

• Maximize Canadian premium opportunity;

• Drive efficiency in processes and systems;

• Build a proud, engaged team delivering outstanding results; 

The company said it should be able to drive continued growth in net revenue, resulting in an increase in gross profit and Adjusted EBITDA for the full year 2023. Additionally, it expects to achieve positive free cashflow for the full year.

Price Action

Rubicon Organics’ shares closed Wednesday market session 4.96% higher at $0.4104 per share.

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