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Emerald Health Therapeutics & # 39; Pure Sunfarms JV Reaches Q2 Sales of $ 32 Million, 78% EBITDA Margin, $ 0.65 / Gram Production Cost, and Third Quarter Yield



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VICTORIA, British Columbia, August 13, 2019 (GLOBE NEWSWIRE) – Emerald Health Therapeutics, Inc. (Emerald) (TSXV: EMH; OTCQX: EMHTF) provided preliminary, unaudited financial results for the second quarter of 2019 for its BC-based joint venture, Pure Sunfarms (PSF). The company will report its full financial results for the second quarter ended June 30, 2019, after the market closed on Wednesday, August 28Dad, 2019 and hosts the 2019 Second Quarter Financial Performance Conference on Thursday, August 29Dad, 2019 at 10:30 ET

Pure Sunfarms sales have consistently increased 125% to $ 32 million. Net income, which includes a net profit of $ 20 million due to changes in the valuation of biological assets, exceeded $ 34 million, which is a third consecutive quarter of profitability. EBITDA was $ 25 million, which resulted in an EBITDA margin of approximately 78%, and the net cash flow from operating activities exceeded $ 6 million. The operation achieved a gross margin of about 84% before non-monetary adjustments to fair value inventory and biological assets. The total cost of production was $ 0.65 per gram, based on increased production volume and lower seasonal costs (eg electricity). PSF sold approximately 8,000 kg of cannabis in the second quarter and approximately 12,000 kg in the first half of the year.

"The financial results for the second quarter of our 50% joint venture, Pure Sunfarms, reflect the progression of our vision and our collective ability to develop a premier cannabis operation," said Dr. Author Dillon, Executive Chairman and President of Emerald. "We worked closely with our JV partner to create the perfect working configuration. With continuous optimization and expansion to double Pure Sunfarms' total output to approximately 150,000 kg per year, we expect significant operational cash flow growth and the value of this Emerald asset. "

A major milestone is the anticipated change from Health Canada of a Pure Sunfarms processing license for the first D3 greenhouse, which will allow Pure Sunfarms to begin direct sales of packaged cannabis products in provincial distribution channels. An additional milestone to be achieved by the end of the year is the completion of the 65,000 square foot GMP certified machining center, including mining. At the same time as these steps and the substantial increase in cultivation in D3, the second greenhouse of Dure Sunfarms, D2 is being transformed, with the first harvest expected in mid-2020.

"Our joint venture, Pure Sunfarms, is setting a precedent in the Canadian cannabis industry with its rapid scale of production, low cost production and impressive financial results, despite achieving full production only partially in the quarter," said Riaz Bandali, CEO of Emerald . "PSF achieves these results on the basis of its efficient, large-scale quality production. Although it achieves exceptional returns through mass sales, we look forward to PSF obtaining Health Canada approval to sell packaged products directly to provincial sales channels, which will allow PSF to expand its business model and customer base.

"Emerald has purchased from PSF a volume of products sufficient to help meet its requirements for the leisure and medical market. As we continue to focus on building a unique product portfolio and expanding our fully owned cultivation, packaging and extraction capabilities, we will use our opportunity to purchase up to 40% of our fixed sunflower production at our fixed rate, according to our agreement. needs in 2019. Emerald is excited by the success of the PSF model and its value as a major investment in Emerald's operating assets portfolio. "

Emerald's financial results for the second quarter ended June 30, 2019, which include the equity results of Pure Sunfarms, are in the final stages of completion and will be reviewed by the Company's auditors before being made public after market closure. on Wednesday, August 28, 2019. The company will host a conference call on Thursday, August 29, 2019 at 10:30 AM ET.

To access the audio broadcast, please dial (866) 652-5200or online at: https://services.choruscall.com/links/emhtf190530.html,

An archived version of the presentation will be available for 90 days in the Investors section of the Emerald website: https://ir.emeraldhealth.ca/events-and-presentations.

About Emerald Health Therapeutics, Inc.

Emerald Health Therapeutics, Inc. is a Canadian licensed manufacturer of cannabis products, with strategic initiatives focused on the differentiated development of value-added products for medical and adult clients, supported by new intellectual property, large-scale cultivation, extraction and encapsulation of soft handles as well as unique marketing and distribution channels. Its 50% clean solar weapons operation in British Columbia reached its full annual production of approximately 75,000 kg in its first operation of the 1.1 million square meter Delta 3 greenhouse; its second 1.1 million-square-foot greenhouse is planned to be fully operational by the end of 2020. Two fully-owned Emerald facilities in Quebec, a high-quality indoor and processing facility in British Columbia, an organic greenhouse and work open, complete construction and work to finally extend the license. Emerald also contracted approximately 1,200 acres of cannabis annually in 2019 to 2022 to extract cheap CBD. His team has extensive experience in life sciences, product development, large-scale agribusiness and marketing.

Please visit www.emeraldhealth.ca for more information or contact:

Rob Hill, Chief Financial Officer
(800) 757 3536 Ex. №5

Emerald investor relations
(800) 757 3536 Ex. # 5
[email protected]

Non-GAAP financial measures

This press release contains references to EBITDA, which is not a standardized measure prescribed by IFRS and is therefore referred to as a "non-GAAP measure". Non-GAAP measures used by the Company may not be comparable to similar measures used by other companies. EBITDA is defined as “income (loss) before interest expense, taxes, depreciation, amortization, foreign currency losses and the net impact of biological assets on income.

The company uses this measure, which is not GAAP, because it provides additional information on the implementation of Pure Sunfarm's entire business, which is not otherwise reflected in IFRS.

Neither the TSX Venture Exchange nor its regulatory service provider (as this term is defined in the TSX Venture Exchange policies) accepts responsibility for the adequacy or accuracy of this release.

Warning note on future statements: Some statements made in this press release, which are not historical facts, are forward-looking statements and are subject to significant risks, uncertainties and assumptions, both general and specific, that give rise to the possibility of actual results or events may differ materially from our expectations expressed or implied by such forward-looking statements. Such statements include obtaining the necessary regulatory approvals; production and processing capacity of various facilities; expansion of facilities; obtaining additional cultivation licenses and other permits; production in various facilities; receiving deliveries from hemp; conclusion of strategic agreements; payments of amounts due and payable by Emerald; transplanting crops; obtaining final municipal approvals; evaluation of harvesting and harvesting techniques; the scale of reliable, quality cheap cannabis; and expected production costs.

We cannot guarantee that any future statement will be made and readers are warned not to unduly rely on these forward-looking statements. These forward-looking statements include risks and uncertainties related to, among other things, changes in law and regulations; changes in government; inability to obtain regulatory approvals or permits; inability to obtain the necessary funding; results of production and sales activities; research results; regulatory changes; changes in prices and costs of raw materials; demand for labor; search for products; default of counterparties under contractual obligations; as well as the risk factors described in the Company's annual information form and other regulatory documents. The forthcoming statements contained in this press release represent our expectations at the date of this Agreement. The perspectives presented are presented in order to provide information on current management expectations and plans and to enable investors and others to gain a better understanding of our expected operating environment. Readers are cautioned that such information may not be appropriate for other purposes. The Company assumes no obligation to update or review such statements to reflect new circumstances or unforeseen events as they occur, unless required by applicable law.

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