Rubicon Organics Inc. (ROMJF) reported a net revenue of CA$12.1 million for Q2 2024, representing a 7% increase compared to the same period in 2023. While the company achieved higher overall sales, its gross profit for the quarter came in at CA$4.05 million, a 12% decrease from the previous year. This indicates that although Rubicon Organics is selling more products, the amount of profit they retain after covering production costs has shrunk.
Despite the decline in gross profit, CEO Margaret Brodie highlighted the company’s continued leadership in the premium cannabis market, emphasizing the success of their recent vape product launches. Brodie also noted that Rubicon Organics’ national distribution has reached over 40% of stores within the first two months of sales.
Janis Risbin, CFO of Rubicon Organics, stated in a press release, “We are focused on delivering products and services that consistently meet the highest quality standards while maintaining our market leadership in the highly competitive cannabis industry. We are also advancing through the late stages of our debt financing negotiations, which I expect to be completed at similar terms to our existing debenture.”
The decline in gross profit was attributed to a shift in consumer preferences toward larger format purchases, which generally have lower profit margins. Gross profit before fair value adjustments stood at CA$3.65 million, representing a 21% decrease compared to Q2 2023.
Rubicon’s adjusted EBITDA for Q2 2024 was CA$0.9 million, a decrease from CA$1.8 million in the same period last year. Despite this, the company generated CA$1.1 million in operating cash flow and reported a free cash flow of CA$0.7 million for the quarter. Risbin emphasized that these financial results were achieved while the company continued to invest in an Enterprise Resource Planning (ERP) system to support future growth.
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