SYDNEY, AUSTRALIA, Aug. 30, 2018 (GLOBE NEWSWIRE) — Elixinol Global Limited (ASX: EXL, Group or the Company), a global company operating in the industrial hemp, dietary supplements and emerging medicinal cannabis sectors, has reported strong revenue growth for 1H FY2018 (December year end) of AU$14.9m, up 110% on 1H FY2017. Underlying EBITDA of $0.8m was up on 1H FY2017 of ($0.1m) resulting in a maiden profit for the Group.
The strong growth resulted from a notable increase in product sales, driven largely by EXL’s Colorado-based business, Elixinol.
Elixinol reported revenues for 1H FY2018 of AU$12.5m, up 119% on 1H FY2017. EBITDA for 1H FY2018 was AU$2.2m, up 100% on 1H FY2017. The EBITDA margin declined slightly for 1H FY2018 at 17.2% from 19.9% in 1H FY2017 due to strong volume growth in lower margin private label sales. Other segments: e-commerce, mid-market and bulk, were all strong performers. Investment has been made for future growth and production efficiencies, which are expected to show benefit in FY2019.
Elixinol is following a disciplined approach to driving growth, supported by investment in farming and production capabilities in Colorado. A channel sales strategy is in place to drive growth in the higher-margin e-commerce, national accounts, mid-market accounts and private label branded products segments. Key sales hires focused on national and mid-market distribution were made to drive future sales and higher margin growth. Additionally, investment was made by Elixinol to scale e-commerce in the US, Europe and Japan, and to support an increase in marketing activity during the period. A number of new products are expected to be launched in calendar 2019.
Paul Benhaim, EXL’s CEO said: “Due in large part to Elixinol’s strong performance, this is a solid first half yearly result for EXL and we are delighted to be the only ASX listed company in this sector to record a profit. We have delivered exceptionally strong top line growth, which has seen the Company more than double its size and enabled us to report our first profit position.”
Paul continued, “Significant business-building initiatives have been put in place to increase cultivation and manufacturing capability for Elixinol in Colorado, including a joint venture supply agreement and a new production facility which will come on stream later this year.”
The Northern Colorado High Plains Producers (NCHPP) cultivation joint venture with Kersey Ag Company LLC entered into in April, will shore up supply of US domestic cannabidiol (CBD) hemp. The JV brings a cultivation capacity of 700+ acres, of which approximately 173 acres were planted in 1H FY2018.
The new vertically integrated operation in Colorado expects a new GMP certified production facility to be commissioned in late calendar 2018 which will more than double the usable capacity for processing, manufacturing and fulfilment operations, expanding capacity from a 8,700 sq. ft. facility by an additional 12,000 sq. ft., totalling 20,700 sq. ft.. Production capabilities will be 5,000 kg of alcohol-extracted hemp CBD and 3,125 kg of CO2 extracted CBD extract. Further expansion plans are underway in the medium term for an additional 20,000 square foot facility.
Elixinol has an existing export footprint with sales to 40 countries, which it plans to grow significantly in the near term with Europe and Japan seen as key markets. Major activities are underway to further develop localized marketing and sales activities in Europe and Japan to strengthen customer channels including optimising existing distribution agreements and alliances.
In addition to the significant investments made to support the demand for Elixinol product internationally, Elixinol expects increased consumer reach pending favorable hemp legislation within the 2018 Farm Bill.
“We are closely monitoring the status of the 2018 Farm Bill, which we anticipate will include legislation that will strengthen our business in the United States, Europe and Japan,” said Gabriel Ettenson, Elixinol General Manager.
EXL is publicly traded on the Australian Securities Exchange (ASX:EXL) and through its businesses has a global presence in the cannabis industry including hemp-derived CBD dietary supplements, food and wellness products, as well as the cultivation and manufacture of medicinal cannabis products. Elixinol Global’s businesses include:
- Elixinol, which was founded in 2014, is a manufacturer and global distributor of industrial hemp based dietary supplement and skincare products, with operations based out of Colorado, USA;
- Hemp Foods Australia, which was founded in 1999, is a leading hemp food wholesaler, retailer, manufacturer and exporter of bulk and branded raw materials, and finished products;
- Elixinol Australia, which was founded in 2014 to participate in the emerging Australian medicinal cannabis market and submitted licence applications for cultivation and manufacture to the Office of Drug Control in early CY 2018. These applications are currently pending approval.
Forward-Looking Information: This news release contains “forward-looking information” within the meaning of applicable securities laws relating to statements regarding the Company’s business, products and future the Company’s business, its product offerings and plans for sales and marketing. Although the Company believes that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Such forward looking statements are subject to risks and uncertainties that may cause actual results, performance and developments to differ materially from those contemplated by these statements depending on, among other things, the risks that the Company’s products and plan will vary from those stated in this news release and the Company may not be able to carry out its business plans as expected. Except as required by law, the Company expressly disclaims any obligation, and does not intend, to update any forward-looking statements or forward-looking information in this news release. Although the Company believes that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct and makes no reference to profitability based on sales reported. The statements in this news release are made as of the date of this release.
The ASX has not reviewed, approved or disapproved the content of this press release.
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