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| Statement |
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| During 2022, InterCure achieved record revenues of approximately $150 million, 77% more than the revenues of 2021 |
| In line with our profitable growth strategy, we executed well on all fronts |
| This resulted in a strong financial and operating results, while further positioning InterCure for continued growth |
| And yes, we believe that once medical cannabis products in high quality will be offered in the UK market in decent prices, of course, comparing to the local market conditions, we will obtain a good market share and eventually, the market will grow because of the same trends that we've seen in Israel in the early days |
| Our remarkable profitable growth is a proof of our team's ability to execute with strong dedication to excellence, as demonstrated by our successful implementation of skilled professional decisions, capital investments and strategic legal and regulatory victories |
| I'm very proud of our team delivering continued solid performance |
| These strong results are especially impressive when you take into account the slowdown in new patient procurement in Israel during the first half of 2022 |
| UK market is in initial stage, but growing fast, representing a good opportunity for us also |
| So we expect margin -- positive impact on our gross profit margin as we will scale up and launch more products in those territories |
| With the strength of our balance sheet and our solid performance, including cash flow generation, we are well positioned to continue executing our profitable growth strategy leveraging the foundation and leadership we have built to capitalize on global expansion and consolidation opportunities |
| Eventually, for 2022, patient count grew only 18% while InterCure grew 77%, emphasizing the strength of our leading platform and we believe this condition represents an opportunity to grow our leading share organically and inorganically even before barriers were lifted and the market growth will resume |
| This further solidified Canndoc's southern cultivation site as one of the largest and most advanced facilities of its kind in the industry |
| Our expert teams have also successfully added and produced tones of new highly demanded strains into their growth cycles, including premium high THC Cookies cultivars, [hubble] (ph) genetics, and some of the industries top shelf products |
| We are very proud with our third consecutive year with a positive cash flow from operation generating in 2022, $20 million or NIS51 million, proving our financial discipline |
| A slight decrease compared to $9 million or NIS22 million for the third quarter of 2022, demonstrating the strength of our platform and our ability to execute |
| We believe that these market conditions and completing the licensing of the eight pharmacies which are yet to dispense medical cannabis, positioning us to further increase our leading market share and will revert in the coming quarters as the market will consolidate and the prescription reform will pass through |
| In the first quarter of 2023, we continue to see strong demand for our high quality products and continued shift from legacy mid quality to value products |
| Revenue growth during the fourth quarter of 2022 reflects increased market share and growing patient demand for our branded products and expansion of the -- and the strength of our medical cannabis dispensing operations |
| We also reported another record fourth quarter revenue of $41 million or NIS106 million, an impressive growth over 30% greater than the fourth quarter of 2021 revenue of $31 million or NIS80 million and up by 6% sequentially compared to the third quarter of 2022 |
| We also announced expansion of the company's partnership program forming a collaboration with the leading cannabis brand Binske to develop and offer range of non-flower cannabis products, which we believe will significantly enhance our product portfolio and further strengthen our market position |
| We delivered record full year revenue of $150 million or NIS389 million, increase of 77% compared to $85 million in 2021, an impressive growth as patient count grew only by 13% |
| I'm happy to update that our teams have made great achievement and successfully completed export of InterCure's products to our EU hub, preparing for EU GMP commercial launches in UK and Germany |
| Net profits after tax were just under $70 million, generated $20 million cash flow from operations and we ended the year with $95 million cash in hand and a solid balance sheet |
| Our gross profit increased to over $60 million, representing 41% of revenue and adjusted EBITDA increased to $32 million, representing 22% of revenues |
| Growing our cannabis dispensing footprint more than 9 times in the last three years has positively impacted our businesses, while ensuring patient receive the highest quality service from more than 90 highly trained specialized pharmacies |
| We have extended our successful exclusive partnership with Organigram, a world leading indoor grower to supply us with up to 20 tons of our chosen genetics, extending its reach into our core markets in Europe and UK |
| In 2022, our revenue exceeded $150 million with adjusted EBITDA of $32 million, a significant achievement considering pharmaceutical-grade recognition was only introduced less than five years ago and our first GMP prescribed product was dispensed in the pharmacy only in late 2019 |
| Our 15 years of know-how and execution, proven model and leadership position set us up to succeed in every territory with supportive regulatory framework |
| 2022 was a rather successful year for InterCure as we continue to solidify our position as the largest fastest growing and profitable cannabis company outside North America |
| Before I hand over the call to Amos, I want to note that 2022 has concluded 16 years of organic growth and one of our best year to date |
| Statement |
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| This was mainly due to the loss of physicians responsible for more than 20,000 market prescription as the Ministry of Health halted their license to prescribe medical cannabis |
| During the fourth quarter, we have witnessed financial weakness affecting many players in the industry |
| Again, no crystal baller for the timing, but this is a big concern and a big surprise for the patient community |
| Of course, it's also a big concern of the industry |
| As the new government in Israel assembled, the new Ministry of Health stated that the new reform would be implemented soon and while patients suffering from current bottom neck of lack of prescribing doctors, many companies in the industry are struggling from continued losses and lack of capital |
| Financially struggling companies and companies exiting the market sold low to medium quality products at lower prices to liquidate their inventories |
| I mean, we've seen a trend of struggling companies exiting the market selling their inventories in lower than cost sometimes and affecting the market |
| But as I reflect on kind of the evolution of your gross margin on a multiyear basis, it would seem reasonable to think that there's also a margin drag from your international operations |
| And that caused a lot of constraints |
| But given that Q1 is sort of already in the rearview mirror here, typically when we see some of this price erosion or some just difficult dynamics with respect to pricing, it's not typically a one quarter event |
| I know you sort of explained some of the dynamics that are happening in the market that are causing some headwinds |
| And from time to time, the Ministry of Health is halted and canceling their licenses in the first half of 2022 |
| So again, it's a huge suffering for patients |
| I think it's been our experience that progress in international and in this instance European cannabis market, has certainly been slower to progress that clearly informs what your differentiated strategy is to be sure |
| But again, the patient community in Israel is also a big political power |
| And the issue with Better is right now on hold |
| I saw you canceled the deal in Australia with Better |
| We have expiration dates on pharmaceutical products and also we are seeing most of those player exiting the market |
| And this will continue to happen unless we solve this bottleneck |
| We are seeing this trend since Q4 affecting the market prices and movement towards those more value products |
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