Key Takeaways:
- Revenue Growth: Green Rise Foods reported a 14.7% increase in annual revenue, rising from CDN$23.1 million in 2022 to CDN$26.5 million in 2023.
- EBITDA Decline: Adjusted EBITDA fell to CDN$2.8 million due to environmental factors and adverse weather, down from CDN$4.2 million the previous year.
- Covenant Breach: Operational challenges led to a covenant breach with Royal Bank of Canada, with a remediation plan set for completion by August 1, 2024.
- Debt Management: The company is current on all mortgage and debt obligations and expects to correct its coverage ratio by the agreed deadline.
- Operational Improvements: Extensive process reviews and strategic changes have been implemented to enhance yield, efficiency, and cost management for 2024.
Financial Performance Overview
Green Rise Foods Inc. (TSXV: GRF), a leader in greenhouse agriculture, has unveiled its consolidated financial outcomes for the fiscal year ending December 31, 2023. Despite a challenging year marked by environmental setbacks, the company managed to post a significant revenue increase to CDN$26.5 million, up 14.7% from CDN$23.1 million in 2022. This growth underscores the robust demand and expanding market reach of Green Rise’s agricultural products.
EBITDA and Financial Challenges
However, the year was not without its financial hurdles. Adjusted EBITDA saw a reduction to CDN$2.8 million, a drop attributed largely to unforeseen environmental factors and adverse weather conditions. These elements not only impacted operational efficiency but also led to a covenant breach with the Royal Bank of Canada. This breach has since been addressed with a tolerance letter from RBC, granting Green Rise Foods time until August 1, 2024, to remedy the situation.
Debt and Operational Status
On the debt management front, Green Rise is current with its mortgage and other financial obligations. The company’s proactive measures and strategic financial management are expected to restore its annual fixed charge coverage ratio by the specified deadline in 2024, stabilizing its financial base.
Looking Ahead: 2024 Corporate Update
As we move into 2024, Green Rise Foods has laid out a comprehensive plan to not only overcome the previous year’s obstacles but also to set a benchmark in operational excellence. The current crop season shows promising developments with active production in the GR1, GR2, and GR3 greenhouses.
Cost Management and Operational Efficiency
The company is keeping labor costs within budget and is making strides in reducing input costs related to packaging, seeds, natural gas, biologicals, and fertilizers. Management’s review of operational processes has led to significant improvements in plant yield and health, which are expected to enhance overall productivity and efficiency.
Strategic Initiatives and Leadership Comments
“Management has implemented recommended changes that have already started showing positive results in early 2024,” said Vincent Narang, CEO of Green Rise Foods. These adjustments aim to minimize waste and increase recoverable yield across all operations. Moreover, leadership is in the final stages of negotiating favorable pricing terms with Mastronardi Produce Ltd., which is likely to further bolster the company’s financial standing and market competitiveness.
Green Rise Foods Latest News
Record Q3 Fiscal 2023 Financial Results (2023/11/02)
Green Rise Foods Inc. (TSXV: GRF) has reported significant financial growth for the nine months that ended September 30, 2023. The company’s fresh produce revenue increased by 19.4%, and Adjusted EBITDA reached CDN $3.5 million. Green Rise Foods improved its liquidity position and operational foundation, and management is focused on future growth. CEO Vincent Narang expressed excitement about the company’s role in Controlled-Environment Agriculture (CEA).
Reports Record Financial Results for Q2 2023 (2023/08/13)
Green Rise reported a record fresh produce revenue of $10.9 million for the six months ending June 30, 2023, marking a 33% increase from the same period last year. The Adjusted EBITDA for the three months ending June 30, 2023, stood at $2.3 million, almost double from the corresponding period in 2022. Green Rise renewed its mortgage with a principal amount of $12.8 million and amended its credit facility with RBC to increase its operating lines. The company’s working capital ratio deficit improved significantly, and it renewed its lease agreement for 15 acres of its Organic greenhouse to Mastronardi Produce Ltd. for a term extending to December 31, 2026.
Reveal Refinancing & Credit Facility Amendment (2023/07/06)
Green Rise Foods Inc. (TSXV: GRF), also known as “Green Rise,” has announced that the Royal Bank of Canada (RBC) and its Board of Directors have approved the refinancing of its Green Rise 1 (GR1) range mortgage and an amendment to its credit facility.
Image provided by Green Rise Foods
