As earnings season gets into full swing, Canada’s Organigram has become the latest major cannabis operator to publish its financial performance figures.
In the second quarter of 2024, Organigram reported a boost in revenues across its recreational operations, but saw a significant decline in profits thanks to a drop in international sales despite completing its first shipments to Germany’s Sanity Group and the UK’s 4C Labs over the period.
Gross revenues for the period across all operations increased by 9% year-on-year to $57.4m, buoyed by a 21% increase in recreational net revenues to $33.1m.
However, total net revenues ($37.6m) fell by 5% compared to Q2, 2023, which it attributed to a reduction in international sales revenue.
“Our higher international sales in Q2 Fiscal 2023 resulted in a comparatively lower adjusted gross margin rate in Q2 Fiscal 2024,” said Greg Guyatt, Chief Financial Officer.
“However, we are expecting international revenue to continue along the growth trajectory we have seen over the last two quarters while lower cultivation costs, which we achieved beginning in Q2 Fiscal 2024, begin to flow through to our income statement in Q3 fiscal 2024.
This drop in international revenues comes despite the completion of its first international shipment to Sanity Group in Germany, and to 4C Labs in the UK, deals worth a combined $2.1m.
With an eye on increasing international sales to Europe, Organigram also reported the completion of preliminary European Union Good Manufacturing Practices (“EU-GMP”) audit of the Moncton facility.
These lower international sales also impacted the company’s profitability, reporting an EBITDA loss for the period of $1m, compared to a profit of $5.6m in Q2, 2023.
However, Mr Guyatt added: “As we head into the second half of our fiscal year, we are on track to deliver full-year adjusted EBITDA that will exceed that of Fiscal 2023 and positive cash flow from operations before working capital changes.”
