Revenue for Indiva Limited (TSXV: NDVA) (OTCQX: NDVAF) continues to be primarily derived from edibles like Wana Sour Gummies and Bhang Chocolate.
On Tuesday, the Ontario-based company released its financial report for Q2 this year along with a list of noteworthy operational highlights and events.
The introduction of the new Indiva Life consumer brand at the 2022 Lift&Co Expo is one example. Initial products released under the new brand will include extracts and edibles.
The adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for Indiva saw a sequential improvement in Q2 losing only $150,000 in comparison to a loss of $380,000 in Q1 and declined year-over-year when compared to the $490,000 profit margin generated in Q2 last year.
The company states that the decline was linked to lower revenue and elevated marketing expenses offset by a decreased cost of goods.
Year-to-date adjusted EBITDA saw a much greater loss of $530,000 in comparison to $10,000 lost in Q2 of 2021.
The company reported a gross revenue of $8.9 million in Q2 which is an 8.1 per cent decrease from the previous quarter.
Operating expenses in the quarter stayed flat at $3.45 million because of lower general and administrative costs which were down 18.8 per cent year-over-year and 6.1 per cent sequentially.
Year-to-date net revenue for the company increased by 12 per cent year-over-year to $17 million, a new record.
Indiva is a Canadian company that distributes vapes, edibles, flower, capsules and extracts through its INDIVA, Artisan Batch and Indiva Life brands.
Operational highlights for the company included receiving a Best in Grow award from Cannabis New Brunswick (NB) for best indica flower, the launch of new stock keeping units (SKUs) including Wana Passion Fruit and Shine Clementine gummies and the signing of a five-year licensing and manufacturing agreement with Dime Industries for the production of vaporizers.
The company anticipates that net revenue will be higher sequentially in Q3 and Q4 primarily due to introducing new products including Dime Industries vapes, Pearls gummies and other Indiva Life branded products making their way into the market.
“We are very pleased to report record net revenue and gross profit on a year-to-date basis, and expect to see further revenue growth in the second half of 2022, driven by the introduction of more than 25 new SKUs across Canada,” said Niel Marotta, President and Chief Executive Officer of Indiva.
“The second quarter was extremely busy operationally, as we began manufacturing new products, including our first commercial batches of Pearls gummies, which were delivered to the OCS subsequent to quarter end. We expect to ship Pearls, and many other new products, to additional provinces in the coming weeks,” he added.
“We are pleased to see improvement in gross margins in the quarter, however as per our June 27, 2022 press release, delays in new product deliveries and lack of provincial delivery appointments in certain provinces in late June caused approximately $1 million of sales to slip into Q3 2022, resulting in declining net revenue on a year-over-year basis.”