Medical Discourse Quarterly Record Revenue

by time news

Revenues from the beginning of the year grew by 47% to NIS 37.8 million compared to the corresponding period and even crossed revenues throughout 2020.

Adjusted profit for the quarter grew by approximately 74% compared with the corresponding quarter and amounted to approximately NIS 3.4 million; Adjusted profit for the period amounted to approximately NIS 7.9 million, an increase of approximately 15% compared to the corresponding period.

The company continues to implement the strategy, which focuses on maintaining and strengthening the relationship with the final Israeli customer while increasing its grip on the entire value chain.

The company increased its capacity through satellite farms, contracted with other factories, acquired two pharmacies on the way to establishing a pharmacy network and established the customer service center.

The company expects a continued increase in revenue in the fourth quarter of 2021 and estimates that revenues will be higher than in the third quarter of 2021.

For the first time it took a credit line while diversifying its sources of funding.

Nir Zichlinsky, Chairman of the Medical Group Discourse“Sheikh Medical is working to improve and expand its capabilities in all value chain links. We are in the midst of a growth process and the changes are beginning to be reflected in the company’s results. I believe that the positive trends that characterized the current quarter will continue to accompany the company in the coming quarters.

In accordance with the company’s concept, which emphasizes the Israeli end customer, we have acquired control of two pharmacies licensed to issue cannabis, the results of which will be fully reflected starting next quarter.

The cannabis market is in regulatory uncertainty but in our estimation some of the expected changes will benefit the company and consumers. We are prepared for various and varied developments and hope that the spirit of regulation will continue while advancing certainty.

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Yogev Sarid, CEO of Sheikh Medical Group: “The company continues to implement the strategy which focuses on maintaining and strengthening the relationship with the final Israeli customer while increasing the grip on the entire value chain.

The company has increased its growing capacity through satellite farms, in a way that allows better control over the qualities and quantities of crops. We have contracted with other factories, in a way that allows flexibility and adjustment of production to the increased level of demand. We have completed the acquisition of control of two pharmacies on our way to establishing a pharmacy chain, in addition to collaborating with all pharmacies in Israel that issue cannabis and we have strengthened the company’s dedicated customer service center for the benefit of the customer.

Direct contact with the end customer allows us to feel his tastes and desires and is significant information for us. For example, as part of the contact with the area we identified that the “Dutch” variety, sold under the old regulation would now be suitable for some patients. We were prepared accordingly and indeed with its re-launch it was in high demand.

Another significant tier that supports the development and growth of the company is the financing side. For the first time, the company took out a bank credit line. The credit was provided by Bank Hapoalim and this is the first significant bank credit that this bank provides to an Israeli company operating in the field of medical cannabis, and in particular to a company licensed to grow medical cannabis in Israel. We consider this an important expression of trust in the cannabis market in general and in discourse in particular and the attractive interest rates indicate this.

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This framework will allow the company financial flexibility while diversifying the sources of financing and will be an additional source of support for growth in the volume of business activity and in particular in investment in working capital.

Medical Group Discourse (Tel Aviv Stock Exchange: Discourse), reports its results for the third quarter and the first nine months of 2021.

Summary of data for the second quarter of 2021:

Revenues in the quarter amounted to NIS 16.2 million, compared with NIS 6.6 million in the corresponding quarter last year.

This is a record quarter for the company with an increase of about 146% compared to the corresponding quarter (and 52% compared to the previous quarter). It should be noted that the Company expects continued growth in revenues in the fourth quarter of 2021 and estimates that revenues will be higher than in the third quarter of 2021.

Gross profit before the effect of changes in the fair value of a biological asset in the quarter amounted to NIS 7.4 million, an increase of approximately 97% compared with approximately NIS 3.8 million in the corresponding quarter last year.

Operating profit / loss – The operating loss in the quarter amounted to NIS 0.7 million, compared with a profit of NIS 1.9 million in the corresponding quarter last year. The change is mainly due to adjustments to the fair value of inventory and biological assets. Excluding these adjustments, operating profit would have amounted to NIS 3.1 million, compared with NIS 1 million in the corresponding quarter last year.

The net loss for the quarter amounted to NIS 0.75 million, compared with a net profit of NIS 2.3 million. The change is mainly due to adjustments to the fair value of inventory and biological assets. Adjusted profit (excluding adjustments to biological assets and share-based payment) in the quarter was NIS 3.4 million, compared with NIS 2.0 million in the corresponding quarter last year, an increase of 74%.

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Summary of data for the first nine months of 2021:

Revenues in the period amounted to NIS 37.8 million, an increase of 47% compared to the corresponding period last year in which revenues totaled NIS 25.8 million, revenues in the first nine months of the year are higher than revenues for the whole of 2020. The increase in revenues was mainly due to sales of the company’s products in the Israeli market, including the launch of a number of products, as well as revenues from exports.

Gross profit before the effect of changes in the fair value of a biological asset amounted to approximately NIS 16.2 million, compared with approximately NIS 15.2 million in the corresponding period last year, an increase of approximately 6.3%.

Operating profit amounted to NIS 1.6 million, compared with NIS 11.1 million in the corresponding period last year. The change is mainly due to adjustments to the fair value of inventory and biological assets. Excluding these adjustments, operating profit would have amounted to NIS 5.5 million, compared with NIS 8.2 million in the corresponding quarter last year.

The net profit from the beginning of the year was about NIS 3.0 million, compared with about NIS 8.4 million in the corresponding period last year. Adjusted profit (excluding adjustments to biological assets and share-based payment) from the beginning of the year was NIS 7.9 million, compared with NIS 6.9 million in the corresponding half last year, an increase of 15%.

In all the aforesaid sections, the explanation for the changes is the same as the quarterly explanation as detailed above.

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