OrganiGram Holdings Inc (NASDAQ:OGI) stock plunges 13.65% (As on April 12, 11:15:41 AM UTC-4, Source: Google Finance) after the company posted mixed result for the second quarter of FY 23. Q2 Fiscal 2023 adjusted gross margin was $13.4 million, or 34% of net revenue, compared to $8.3 million, or 26%, in Q2 Fiscal 2022. The improvement in quarterly results was primarily due to lower cultivation costs that was the result of higher plant yields, ongoing cost efficiency improvements, an increase in international shipments, and the benefit of a lowered per unit costs that were achieved due to increased scale of operations at the Moncton Campus.  Q2 Fiscal 2023 net loss was $7.5 million, compared to a net loss of $4.0 million in Q2 Fiscal 2022. Net loss increased due to the change in fair value of derivative warrant liabilities which was a gain of $2.4 million during Q2 Fiscal 2023 compared to a gain of $10.6 million in Q2 Fiscal 2022, as movements in the Company’s share price had a greater absolute impact on the fair value of the derivative warrant liability in the prior year period. Q2 Fiscal 2023 Adjusted EBITDA was $5.6 million compared to $1.6 million in Q2 Fiscal 2022. The improvement is primarily attributable to the increase in adjusted gross margins due to the higher volume of products sold, increased international sales, and lower cultivation and post-harvest costs. Q2 Fiscal 2023 net cash used in operating activities was $19.7 million, compared to $0.8 million cash used in Q2 Fiscal 2022, which is primarily due to higher working capital needs in the current year period resulting from the growth in receivables from increased revenues and a decrease in accounts payable and accrued liabilities

OGI in the second quarter of FY 23 has reported the adjusted loss per share of 2 cents, beating the analysts’ estimates for the adjusted loss per share of 1 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 24 percent to $29.27 million in the second quarter of FY 23, missing the analysts’ estimates for revenue by 9.74%. The increase was primarily due to an increase in international revenue, partly offset by a decrease in medical sales. On February 28, 2023, the Company had unrestricted cash and short-term investments balance of $72.0 million compared to $98.6 million at August 31, 2022. The decrease is primarily a result of capital expenditures of $13.9 million, along with a $14.5 million reduction to payables.

For Fiscal 2023 the Company forecasts cash capex of approximately $32 million at the three facilities. This spend would relate to the completion of the expansion at the Lac-Supérieur facility and also include automation investments at the Winnipeg edibles and Moncton flower facilities.