Flora Growth Corp. (NASDAQ:FLGC) Q4 2022 Earnings Call Transcript

Jessie Casner: We can.

Aaron Grey: All right. Fantastic. Good morning. Thanks for the questions today. So first question for me. I see the revenue increase here. Just wanted to talk a little bit more about the EBITDA. So you guys spoke towards EBITDA for the year. I just wanted a little bit – speak a little bit more towards EBITDA for the quarter it’s based on my math, I know it wasn’t reported 4Q, it might have been down a little bit. So I just wanted to talk about the EBITDA outlook that you guys have, what it would have been for 4Q and then how we think about FGHs EBITDA now that that closed at the end of last year, and that will be included in 2023. So just really expectations for EBIT to be included within the revenue guidance that you guys have provided. Thanks.

Luis Merchan: Okay. I’m going to give that question to Elshad.

Elshad Garayev: Hi, Aaron. Good morning. We – in terms of EBITDA for the quarter, adjusted EBITDA, we definitely were impacted. We didn’t publish 4Q results because we are publishing full year and a full year comparison were provided. But if we did, based on a mathematical difference based on previously provided IFRS results and full year results, we’ve definitely seen some reduction in gross profit in 4Q, which was impacted by year-end adjustments as well as the year-end sales campaigns and discounts, which are primarily driven by our House of Brands division, which resulted in a lower adjusted EBITDA compared to – for full year. In terms of €“ for the projections for next year, we’re still in a process of integrating FGH into our operational framework.

As we go to the – as well as trying to fully ascertain the impact of higher-margin new revenue streams related to the cannabis sales. As we continue assessing those impacts, we believe that the lower margin gross profit coming from FGH will be partially offset by those new revenue streams. And as we go to next year, we will be providing a more accurate guideline when we publish our 1Q results.

Aaron Grey: Got it. Great. Thanks for that, Elshad. Second question for me, I just want to talk about some of the expectations for exports. Just wanted to see how you’re looking at the international landscape today. And obviously, there’s been some reports last Friday in terms of how Germany might change its rollout. It’s now being more phased with an initial pilot. I know initial expectations were already that you weren’t going to potentially have the ability to export from Colombia to Germany

Luis Merchan: You cut off slightly, Aaron, but I think we have the most important components of that question. So I’m going to start and then I’ll allow any of my team members to complement. I would say that first and foremost, our revenue guidance is based on the regulation framework that exists today around the globe. We have been very, very careful to ensure that we’re conservative in terms of what is expected from a regulatory standpoint. That has been a key component of our budgeting and forecasting because we know if we are planning on the comp in terms of regulatory, we have been laid down a number of times already over the years. So with that being said, it’s important to highlight that we are already exporting cannabis, both derivatives and flower out of Colombia into geographies where we’re able to do so across the globe.