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Indiva Limited (OTCPK:NDVAF)1 (TSXV:NDVA) released its financial and operating results for the first fiscal quarter ended March 31, 2023, revealing net revenue of CA$9.4 million, ($7 million) representing a 1.1% sequential increase from Q4 2022, and a 6.0% increase year-over-year from Q1 2022.
Q1 2023 Financial Highlights
Gross profit before fair value adjustments, impairments and one-time items improved year-over-year by 20.3% and sequentially by 15.8%, to a record CA$3.2 million, or 33.6% of net revenue, versus 29.3% in Q4 2022 and 29.6% in Q1 2022.
Inventory impairment charges in the quarter totaled CA$800,000. This impairment includes a write off of aged finished goods and bulk cannabis, bulk lozenges which cannot be sold due to Health Canada's recent order to halt production and sale of these products, as well as certain packaging and raw materials. The company will continue to work to monetize any impaired inventory which remains saleable.
Adjusted EBITDA improved sequentially in Q1 2023 to a profit of CA$414,800, versus a loss of CA$500,000 in Q4 2022, and a loss of CA$378,400 in Q1 2022.
Comprehensive net loss of CA$2.3 million included one-time gains and non-cash charges for impairment of inventory and property, plant and equipment totaling CA$900,000. Excluding these amounts, comprehensive loss declined to CA$1.3 million versus an adjusted loss of CA$2.4 million in Q4 2022 and CA$1.9 million in Q1 2022.
"We are pleased to report record gross profit and positive adjusted EBITDA in the first quarter of 2023, and continued gross margin improvement on a sequential and year-over-year basis, as Indiva begins to realize the benefits of our investment into automation for production and processing of edible products," stated Niel Marotta, president and CEO of Indiva.
Outlook
The company expects Q2 2023 net revenue to improve compared to the same period last year; however, there is risk that net revenue may decline sequentially, if sales of new products fail to offset lower sales of ingestible extracts as a result of Health Canada's recent order to stop production and sale of these products. Sequential growth in net revenue is expected to resume in the second half of 2023 driven by the introduction of new products in the third and fourth quarters, resulting primarily from in-house innovation. Gross margins are expected to continue to trend higher and benefit from the implementation of automation in the production and packaging of edible products.
Photo by Esteban López on Unsplash
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