Core brands drive record growth for Indiva Limited in 2023

Canadian edibles maker Indiva Limited (TSX: NDVA) reported record financials for the fourth quarter and year ending Dec. 31, 2023, as it tries to climb its way out of the red.

The company posted record net revenue of $10.9 million in the fourth quarter of 2023, a 16.8% rise versus the same period in the previous year. For the full year 2023, net revenue reached a record high of $37.6 million, a 9.2% rose year-over-year.

The growth was primarily driven by the success of its core products and new introductions such as Pearls by Grön, offset by lower revenue from Wana Sour Gummies and the loss of revenue from lozenges. But Indiva’s focus on in-house brand development is what has really paid off, with 35% of its fourth-quarter 2023 net revenue coming from owned brands, up from 20% in the first quarter of 2023.

“Our core brands continue to gain market share in Canada, as Indiva continues to hold the #1 market share position in edibles nationally,” CEO and president Niel Marott said in a statement.

“More importantly, our revenue mix continues to shift towards brands and products that were developed in-house at Indiva, demonstrating that Indiva’s core competency goes beyond leading the industry as the low-cost producer of edibles, but also as a best-in-class innovator of beloved edible products.”

Indiva’s net loss, excluding one-time expenses and non-cash charges, improved to $200,000 million at the end of the quarter versus a loss of $2.3 million in the same period in 2022. The year’s net loss, excluding those items, improved to $4.4 million versus a loss of $8.4 million in 2022.

Gross profit before inventory write-down improved by 53.3% to a record $4.2 million during the quarter and by 26.9% to a record $13.2 million in 2023. Gross margin before inventory write-down reached a record 38.5% of net revenue in the fourth quarter and 35.1% for the year.

Operating expenses fell by 19% year-over-year in the fourth quarter and by 11.3% for the whole 2023. The company posted record positive EBITDA of $900,000 in the fourth quarter and $1.6 million for the full fiscal year. Adjusted EBITDA also reached record levels, with a profit of $1.5 million in the fourth quarter of 2023 and $2.4 million for the full year.

Indiva expects lower net revenue in the fourth quarter of 2024 due to seasonal factors but anticipates record net revenue and EBITDA for the full fiscal year 2024. The company’s growth is expected to be driven by the continued strength of its core brands, new product introductions, and more efficient production plans.

Marotta added, “We still strongly believe that an increase in allowable THC per pack of edibles would improve public safety, and while we were very disappointed in the results and recommendations from the legislative review published in late March, Indiva remains committed to product innovation that will support both industry and edible category growth. Our enthusiasm to continue to delight of-age cannabis enthusiasts in Canada is unwavering, and we have a robust pipeline of new products which will hit market in the second quarter and in the second half of 2024.”