Intercure(INCR) - 2023 Q2 - Quarterly Report

Financial Performance - Achieved record revenues of NIS 209 million ($75 million) for the first half of 2023, representing over 14% year-over-year growth[5] - Revenue for the six months ended June 30, 2023, was NIS 208,614 thousand, an increase of 14.3% compared to NIS 182,506 thousand in the same period of 2022[16] - Gross profit for the first half of 2023 was NIS 68 million ($24 million), representing a gross margin of 33%[5] - Gross profit for the same period was NIS 66,968 thousand, down 19.3% from NIS 83,010 thousand in 2022[16] - Operating profit decreased significantly to NIS 11,767 thousand, a decline of 68.9% compared to NIS 37,914 thousand in the previous year[16] - EBITDA for the six months ended June 30, 2023, was NIS 18,209 thousand, down 57.2% from NIS 42,543 thousand in 2022[16] - Adjusted EBITDA of NIS 30 million ($11 million) for the first half of 2023, with an EBITDA margin of 14%[5] - Basic earnings per share for the period was NIS 0.11, compared to NIS 0.64 in the same period last year[17] - Total comprehensive profit for the six months was NIS 3,817 thousand, a decrease of 87.4% from NIS 30,175 thousand in 2022[16] Cash Flow and Financial Health - Generated NIS 35 million ($13 million) cash from operations in the second quarter, with a negative cash flow of NIS 17 million ($6 million) for the first half[5] - Voluntary repayment of loans totaling NIS 86 million ($31 million) during the first half of 2023, reflecting a strong balance sheet with over NIS 116 million ($42 million) in cash[5] - Financing expenses increased to NIS 11,842 thousand, compared to NIS 6,099 thousand in the same period last year[16] Market and Product Development - Launched over 20 new SKUs during the first half of 2023, contributing to sustained market share growth[5] - Added 18 new high-demand cannabis strains to cultivation operations, expected to launch in Q3 and Q4 2023[5] - Collaboration agreement signed with Mike Tyson's cannabis brand TYSON 2.0 for exclusive rights in multiple countries[7] - New Israeli medical cannabis regulations expected to increase patient numbers and demand for products starting February 2024[7] Expenses - Research and development expenses were NIS 256 thousand, a slight decrease from NIS 338 thousand in the previous year[16] - General and administrative expenses increased to NIS 21,856 thousand, up 28.0% from NIS 16,958 thousand in 2022[16] Fair Value Changes - The company reported a loss from fair value changes realized in the current year of NIS 5,316 thousand, compared to NIS 2,270 thousand in 2022[16]