The following is a summary of the IM Cannabis Corp. (IMCC) Q2 2024 Earnings Call Transcript:
Financial Performance:
Reported Q2 2024 revenue increased by 11.7% year over year, amounting to $14.8 million, primarily due to the strong performance in the German market.
Gross profit for Q2 2024 was $0.8 million, a decrease of 75.6% year over year, adversely impacted by clearing old inventory and accruals for slow-moving stock totaling approximately $1.9 million.
Operating expenses decreased by 29% due to reductions in G&A and sales & marketing expenditures.Non-IFRS adjusted EBITDA loss in Q2 2024 was $2.3 million, a substantial increase from a loss of $0.5 million in Q2 2023.
Net loss slightly improved to $3.5 million in Q2 2024 from $3.7 million in Q2 2023.
Business Progress:
Focused on the German market post-cannabis legalization, resulting in Q2 sales climbing 200% compared to Q1.
Enhanced sales efforts in Germany led by establishing a supply chain from Israel to Germany and concentrating on reliably supplying mid-market to premium cannabis products.
Strengthened the premium product line in the Israeli market by launching and rebranding under BLKMKT, PICO, and IMC Craft brands.
Opportunities:
The legalization of cannabis in Germany and subsequent market growth provide significant expansion opportunities, with expected growth from a $1.5 billion industry in 2024 to $3.7 billion by 2027.
Targeting an increase in the supply of premium and ultra-premium products in both the Israeli and German markets.
Risks:
Continued clearing of old inventory and accruing for slow-moving stock impacting the gross margin.
Reallocation of company resources prioritizing the German market poses potential risks if the expected returns are not met.
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