cancelation The cannabis index The Tel Aviv Stock Exchange tells the story of the industry’s weakness very well: not much remains of the promise of a new agricultural industry, with technological characteristics and touching on the medical world, which in the past was estimated to have an export potential of billions of shekels.
Another evidence of the difficulties of the companies operating in the industry to establish themselves as a stable investment channel, now comes precisely from someone who was considered one of the most successful in it: BOL (Aspiration for Life). company Amir Marketing , which operates in the field of marketing agricultural inputs and owns 35% of BOL shares, updated that there was an error in the cannabis company’s financial statements. This is expected to affect Amir Marketing’s share of the cannabis company’s profits in the amount of NIS 6-9 million (as mentioned for 35% of the shares).
The source of the error is in the way of recording purchases and obligations to suppliers, so that the company recorded the income from imported cannabis products, but not the amounts it paid to purchase them. The error is regarding the annual report of 2021, the first quarter of 2022, and possibly also for an interim period in 2021. The accountants who sign the reports of the two companies (Amir and BOL) are EY Israel.
● Tens of millions have disappeared, can the accountants from EY shake it off?
● Changes in the management of EY Israel: CPA Sharon Shulman was appointed chairman and CEO of the firm
Exchange of ownership and investment led to a positive turn
In the first quarter of 2022, Amir Marketing recorded a profit of NIS 15 million, and in the entire year of 2021, the profit was NIS 56 million. So the profit that is written off following the discovery of the error does not dramatically change the situation of the company, which trades at a value of NIS 485 million.
The mistake has a much greater impact on BOL and it is expected to be transferred to a loss, after before the disclosure it reported a balance in the bottom line in the first quarter of 2022, and a profit of approximately NIS 19 million in 2021 (compared to a loss of approximately NIS 60 million the previous year). Most of the company’s profitability last year was attributed to the third quarter, in which BOL recorded a profit of NIS 18 million.
The company explained at the time that it was the change of ownership and management that changed BOL’s situation for the better. Amir Marketing and Leon Koffler (the controlling owner of the Super-Pharm chain) converted their loan to the company in shares in 2020, following its heavy losses, and led to the replacement of the veteran CEO Tamir Gaddo with a new CEO, Kafir Avraham, who came from the marketing field. Avraham led a process of cutting costs, purchasing a pharmacy and participating in the import trend in the field of cannabis.