Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- IM Cannabis Corp (IMCC, Financial) reported a significant increase in sales in Germany, with a 200% increase in Q2 versus Q1 and a further 66% increase in Q3, reaching $5.8 million.
- The company successfully integrated its German and Israeli teams, creating a strong supply chain and improving resource efficiency.
- Operating expenses decreased from $4.9 million in Q3 2023 to $4.1 million in Q3 2024, resulting in a 25% increase in efficiency.
- The selling price per gram of white flower increased by 42% to $6.2 per gram, contributing to revenue growth.
- IM Cannabis Corp (IMCC) achieved a 12.2% increase in revenue in Q3 2024 compared to Q3 2023, driven by a 278% increase in German revenue.
Negative Points
- The ongoing war in Israel has impacted the supply chain, causing shipment delays and a 10% decline in the number of medical cannabis patients.
- The company experienced a decrease in revenue in Israel, attributed to the cancellation of the Orin bill, resulting in a $5.1 million revenue drop for the nine months ended September 2024.
- Gross profit for the nine months ended September 2024 decreased by 36% compared to the same period in 2023.
- Net loss for the nine months ended September 2024 was $10.6 million, compared to $6.7 million in the same period in 2023.
- Total assets decreased by $4.2 million or 8.6% as of September 30, 2024, compared to December 31, 2023, mainly due to the Orin agreement cancellation.
Q & A Highlights
Q: Can you provide an overview of the financial performance for Q3 2024?
A: Oren Shuster, CEO, highlighted that Q3 2024 revenue increased by 12.2% compared to Q3 2023, driven by a 278% increase in German revenue. The selling price per gram of white flower rose by 42% to $6.2. Operating expenses decreased by 16%, and the company closely monitored inventory, accounting for $0.6 million in slow-moving stock.
Q: What were the main drivers behind the revenue growth in Germany?
A: The strategic shift to focus on the German market was pivotal, with sales increasing by over 200% in Q2 versus Q1, reaching $3.5 million in Q3. Sales further increased by 66% versus Q2, reaching $5.8 million in Q3. The integration of Israeli and German teams helped build a strong supply chain, contributing to this growth.
Q: How did the company manage to improve operational efficiency?
A: The integration of the German and Israeli teams allowed for shared resources, significantly lowering costs. Active cost management across purchasing, logistics, sales, and marketing improved execution efficiency, resulting in a 25% increase in operational efficiency compared to Q3 2023.
Q: What challenges did the Israeli market face, and how did it impact the business?
A: The ongoing war affected the supply chain, causing shipment delays and a 10% decline in medical cannabis patients from July to October. The July 2024 reform complicated the prescription process, impacting the market. Despite these challenges, the company focused on premium markets and successfully relaunched premium Canadian strains.
Q: What are the future plans for IM Cannabis Corp in 2025?
A: The company aims to build on the solid foundation established in 2024, focusing on further integrating the German and Israeli teams to strengthen the supply chain. The goal is to drive accelerated growth in Germany in 2025 by improving resource efficiency and accuracy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
