InterCure Ltd.

InterCure reported full-year 2022 revenue of $150 million (NIS389 million), up 77% from $85 million in 2021. Fourth-quarter revenue was $41 million (NIS106 million), up more than 30% from $31 million in Q4 2021 and up 6% sequentially. Full-year adjusted EBITDA was $32 million (NIS84 million), up from $22 million in 2021, and gross margin was 41% versus 44% in 2021. Management also said gross profit was over $60 million, net profit after tax was just under $70 million, operating cash flow was $20 million, and year-end cash was $95 million versus $83 million a year earlier. For 2023, the company expects CapEx to be at least 50% lower than 2022, and it plans to expand the pharmacy chain to about 35 locations while launching branded products in Germany, the UK and other territories.

CEO Alexander Rabinovitch framed 2022 as a successful year of “profitable growth,” saying the company solidified its position as the largest, fastest-growing and profitable cannabis company outside North America. He emphasized the scale-up of cultivation, new GMP products, international supply chain development, and pharmacy expansion as proof of execution. His tone was optimistic but cautious on timing, repeatedly saying the Israeli prescription reform could be a major catalyst but that he could not predict when it would land.

CFO Amos Cohen highlighted record 2022 revenue of $150 million and adjusted EBITDA of $32 million, with revenue growth outpacing patient growth. He said gross margin was 41% for 2022, down from 44% in 2021, and attributed some pressure to liquidation pricing from struggling competitors, especially on lower-end products. He noted $18 million of CapEx in 2022, expects 2023 CapEx to be at least 50% lower, said the company generated $20 million of operating cash flow, ended with $95 million in cash, and is financing about 70% of CapEx with long-term loans from Tier 1 Israeli banks.

Analysts focused on the Israeli market’s pricing pressure, the likely duration of discounting, and whether the prescription reform could materially accelerate demand. Management said the market mix is roughly 70% high-quality/premium and 30% discounted products, and they think the cleanup of liquidating inventory could take until the middle of the second half of 2023. They also said the prescription reform would remove the doctor-license bottleneck, could support official market growth to 85 tons from 49 tons in 2022, and that InterCure is preparing capacity through cultivation, supply agreements and pharmacy expansion.