Auxly Cannabis Group Inc. XLY CBWTF, a Toronto-based producer of cannabis consumer packaged goods (CPG), announced Monday its financial outcomes for the first quarter ending March 31, 2024. The company announced record-breaking Q1 results, emphasizing significant gains in key financial metrics.
Q1 2024 Financial Highlights
- Net revenue was CA$25.2 million ($18.4 million), an increase of 5% compared to the same period in 2023.
- Net loss was CA$26 million, representing a net loss of CA$0.03 per share on a basic and diluted basis, compared to a net loss of CA$10.2 million in Q1 2023.
- Adjusted EBITDA was CA$2.2 million, an improvement of CA$2.1 million or 1,523% over the same period last year.
- Gross profit was CA$9.5 million, compared to CA$7.9 million during the same period in 2023.
Operational Performance
Operational highlights included the conversion of over CA$123 million in debt into equity by Imperial Brands plc, resulting in a 19.8% ownership stake, and the extension of the Auxly Leamington credit facility to the end of 2025.
The company continues to maintain a strong market position, securing the sixth spot among licensed producers in Canada based on total recreational retail sales. Auxly also leads in the vapor category with its Back Forty brand dominating in Ontario.
Despite these positive indicators, Auxly faced challenges, evident from its net loss of CA$26 million, a significant increase from a loss of CA$10.2 million in Q1 2023. This was largely attributed to a deferred tax expense related to the conversion of Imperial Debenture into shares, somewhat offset by improved gross profits and reduced expenses.
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Management Perspective
“Following a transformative year for Auxly, we have maintained our positive momentum in the first quarter of 2024 and are continuing to achieve profitable growth. Q1 2024 was the best Q1 in Auxly history across key metrics of revenue, gross margin and adjusted EBITDA. Our commitment to product quality, innovation and distribution excellence drove our top-line sales growth year over year; and our continued focus on operational efficiency and prudent capital management helped us deliver another quarter of adjusted EBITDA profitability," said Hugo Alves, Auxly's CEO.
"As we head into summer, we are excited to offer consumers new and innovative products to enjoy like our new larger Back Forty 0.75g pre-rolls, which will also be available to consumers in Quebec. We look forward to another quarter of sustainable, profitable growth and, as always, we will remain passionately committed to our consumers,” Alves added.
Company Outlook
Auxly remains dedicated to sustainable growth, improved profitability, and product excellence. The company aims to expand in key categories such as vape, pre-roll, and dried flower, while optimizing distribution and sales. Auxly also plans to reduce costs, strengthen its balance sheet, and enhance consumer demand during the summer months, driving revenue expansion and gross margin improvements.
CBWTF Price Action
CBWTF's shares were trading 0.23% higher at $0.0444 per share at the time of this writing around 11 AM ET Monday.
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