On Thursday, Rubicon Organics Inc. (OTC:ROMJF) reported a net revenue of CA$12.1 million for Q2 2024, reflecting a 7% increase from Q2 2023. However, the company's gross profit for the quarter was CA$4.05 million, down 12% from the previous year. This means that while Rubicon Organics is generating more sales overall, the amount of profit they keep after covering the costs of producing their products has decreased.
CEO Margaret Brodie highlighted Rubicon Organics' continued leadership in the premium cannabis market, with successful launches in the vape sector contributing to the company's growth.
Brodie noted that the company's national distribution has reached over 40% of stores within the first two months of sales.
"We are focused on delivering products and services that consistently meet the highest quality standards while maintaining our market leadership in the highly competitive cannabis industry. We are also advancing through the late stages of our debt financing negotiations, which I expect to be completed at similar terms to our existing debenture," added Janis Risbin, CFO of Rubicon Organics in a press release.
The decline in gross profit was attributed to a shift in consumer preferences toward larger format purchases, which typically yield lower margins. Gross profit before fair value adjustments stood at CA$3.65 million, a 21% decrease compared to Q2 2023.
Adjusted EBITDA And Cash Flow
Rubicon's adjusted EBITDA for Q2 2024 was CA$0.9 million, a decrease from CA$1.8 million in the same period last year.
Despite this, the company generated CA$1.1 million in operating cash flow and reported a free cash flow of CA$0.7 million for the quarter.
Risbin emphasized that these financial results were achieved while continuing to invest in an Enterprise Resource Planning (ERP) system to support future growth.
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