Melodiol enjoys milestone 2023 as subsidiaries bank profits
Health & Biotech
Health & Biotech
Special Report: Cannabis play Melodiol Global Health is approaching the end of 2023 in a strong position delivering on its strategy to bring core operating subsidiaries to profitability while quarterly revenue continues to break records.
In October Melodiol Global Health (ASX:ME1) announced revenue of $7.5 million for Q3 FY23, a 265% increase on pcp and up 58% from the previous quarter.
The results represent ME1’s third straight quarter of strong growth with total unaudited FY23 revenue generated to date now more than $14.54 million; a record for the company.
ME1 says growth was underpinned by two of its subsidiaries Mernova Medicinal and Health House International (HHI).
Unaudited figures for the Australian division of its HHI show the company generated sales of ~$1 million in October with consistent monthly sales of ~$1 million per month during Q3 FY23.
HHI is focused on the international distribution of medicinal cannabis, and possesses several strategic licenses to store, distribute, import, and export-controlled drugs.
ME1 says adjusted for cost of goods sold (COGS) and operating expenses, HHI Australia was EBITDA positive with a healthy margin of 10.1%.
Q3 FY23 represented the first full quarter of integrated operations for HHI within the ME1 group, after completion of the strategic acquisition in May 2023.
Record sales for Mernova Medicinal Inc has seen ME1’s wholly-owned Canadian subsidiary achieve its third consecutive quarter of record revenues.
Mernova is a licensed producer of cannabis products in Canada for sale under the Ritual brand banner.
ME1 has built a diverse portfolio of plant-based brands in high growth market segments and geographies. Its other subsidiaries include:
Sales generated for Q3 FY23 were up 20% on Q3 FY24 with 104% rise on pcp. Mernova’s year-to-date revenue is now more than $4.95 million for FY23 period, which ME1 says highlighting its ongoing growth trajectory.
Cannabis is legalised in Canada for both medicinal and recreational use. Medical cannabis became legal in 2001, while Canada became the second country in the world to legalise cannabis after Uruguay for recreation in 2018.
To get a foothold of market share for these products, Mernova’s products typically contain >25% THC content, making them some of the highest THC products available on the Canadian market.
ME1 says the growth potential is enormous with Canada’s cannabis industry projected to reach US$2.9bn in 2023, and with an expected annual growth rate of 15.4%, its market volume will hit $US7.98bn by 2028.
ME1’s strategic priority is to generate growth through strategic M&A and the company has built a diverse portfolio of plant-based brands in high growth market segments and geographies.
Reflecting on 2023 CEO and managing director William Lay says it has been a milestone year for the company, building on growth and working to bring subsidiaries to profitability, in turn improving ME1’s financial profile.
This article was developed in collaboration with Melodiol Global Health , a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.