InterCure raises NIS 90M funding to expand facilities post-war damage.

InterCure Ltd. has secured funding of up to NIS 107M to expand its facility in collaboration with the "Tkumah" administration post-war. The funding includes investments from key shareholders and a loan from a major Israeli bank. Once the post-war damage recovery processes are complete, the company plans to return to profitable growth, including exercising a cookies agreement and expanding international operations. Additional substantial payments from Israeli authorities are also expected for war-related damages.

InterCure Ltd. (INCR), an Israeli-based pharmaceutical company specializing in medical cannabis, has secured a significant funding boost of up to NIS 107 million to expand its facilities and accelerate growth post-war [1]. This investment, a combination of funds from key shareholders and a loan from a major Israeli bank, comes on the heels of the company's FY2023 financial results, which reported revenues of NIS 356 million and an adjusted EBITDA of NIS 61 million [1].

Despite challenges from the ongoing conflict in Gaza and the terrorist attack that disrupted H2 2023 revenues, InterCure has demonstrated resilience, maintaining profitability and anticipating growth in 2024 [1]. The company's cash on hand, currently at NIS 111 million, positions it well to capitalize on opportunities presented by the post-war recovery and potential financial compensation from Israeli authorities for war-related damages [1].

InterCure's strategic expansion plans include the launch of products in Germany, a market experiencing regulatory easing in the European cannabis sector [1]. This move aligns with the global trend of pharmaceutical cannabis legalization and presents a significant growth opportunity for the company. Additionally, anticipation around cannabis rescheduling in the U.S. could dramatically expand the market landscape, further diversifying InterCure's revenue sources and reducing reliance on regional markets [1].

The company's financial milestones in FY2023, including a reported annual revenue of NIS 356 million and an adjusted EBITDA of NIS 61 million, signify a substantial look at InterCure's operational efficiency and profitability margins [1]. The EBITDA margin, hovering around 17%, is slightly above average for the pharmaceutical sector, indicating efficient cost management [1]. However, goodwill and asset reductions totaling NIS 68 million due to war damages underscore potential volatility in regional geopolitical stability that could affect future financial stability [1].

Investors should weigh the assured compensation from Israeli authorities against the risk of similar future disruptions. Expectations of sequential double-digit quarterly growth for 2024 suggest a strong forward-looking statement, potentially attractive for growth-oriented investors, provided the company can maintain its profitability trend despite external pressures [1].

InterCure's expansion of its branded product portfolio with over 40 new GMP SKUs and the growth of its dedicated medical cannabis pharmacy chain to 24 locations underscores the company's focus on product differentiation and customer satisfaction [1]. As the company navigates the post-war recovery and continues to expand internationally, investors will closely monitor its financial performance and strategic partnerships.

[1] StockTitan. (2023, February 16). Inter-Cure Announces FY2023 Results: Revenue of NIS 356 Million and 3wdtjdwgust7.html