Hemply Balance (HMPLY) Q2 2024 earnings summary

Executive summary

• Net sales for Q2 2024 were 707 TSEK, down 1.7% year-over-year; H1 2024 net sales were 945 TSEK, down 19.6% year-over-year.

• Q2 2024 saw a positive EBITDA of 280 TSEK, a turnaround from -585 TSEK in Q2 2023, driven by a 66% reduction in operating costs.

• The company is now debt-free following a rights issue and debt-to-equity conversion, resulting in a net cash position.

• Focus remains on the Japanese CBD market, with monthly sales growth and ongoing strategic restructuring.

Financial highlights

• Q2 2024 gross margin improved to 89.7% from 58.3% in Q2 2023; H1 2024 gross margin was 79.1%.

• Q2 2024 net income was 280 TSEK, compared to -1,223 TSEK in Q2 2023; H1 2024 net income was -314 TSEK, up from -2,408 TSEK in H1 2023.

• Earnings per share for Q2 2024 and H1 2024 were 0.00 SEK, compared to -0.43 SEK and -0.85 SEK, respectively, in 2023.

• Cash flow from operations in Q2 2024 was -296 TSEK; cash at period end was 535 TSEK.

• Equity as of June 30, 2024, was 1,464 TSEK, down from 1,580 TSEK a year earlier.

Outlook and guidance

• Management expects continued positive sales momentum in Japan and is actively pursuing strategic transactions to maximize shareholder value.

• Ongoing cost discipline and focus on B2B sales to Japanese distributors are expected to support profitability.