Why did AFRI's operating profit drop sharply in Q2 2022?

Forafric Global PLC's operating profit dropped sharply in Q2 2022 due to **Increased Operating Expenses** and **Higher Interest Expenses**. The company's operating income was -$3.39 million for the quarter, which indicates a significant decline from the previous period. This decline can be attributed to several factors: 1. **Expansion and Modernization Costs**: Forafric has been expanding its operations and modernizing its facilities, which involves significant upfront costs. The company's agreement with Alapala Foreign Trade LLC to expand and construct new mills is a testament to this expansion effort. These costs, although necessary for long-term growth, can temporarily strain financial performance. 2. **Interest Expenses**: The company reported a higher interest expense, which could be due to increased debt levels or higher borrowing costs. Higher interest expenses can erode profitability, especially when combined with declining operating income. In summary, the drop in operating profit is likely a result of Forafric's strategic investments in expansion and modernization, which, while beneficial in the long term, can temporarily strain financial performance.