Debra BorchardtAuxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) released its financial results for the three months ended March 31, 2024, with revenues rising 5% to $25.2 million over last year’s $23.9 million.
The company reported a net loss in the quarter of $26 million versus last year’s net loss of $10.2 million. This translated to a net loss of $0.03 per share on a basic and diluted basis. Auxly attributed the change in net loss to the deferred tax expense on the conversion of Imperial Debenture into shares, partially offset by improved gross profits and lower expenses.
Cash levels fell 16% to $13 million at the end of the first quarter from $15.6 million at the end of 2023.
Hugo Alves, CEO of Auxly, commented, “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.”
Revenue mix
Auxly said that its revenues for 2023 were approximately 59% in sales of dried flower and pre-roll products, with the remainder from oils and cannabis 2.0 Product sales. In 2023, that amount was 54%. The company also reported that net revenues included wholesale bulk flower sales of approximately $4.2 million during the quarter. Approximately 76% of cannabis sales in the first quarter came from sales to British Columbia, Alberta, and Ontario.
Reduced expenses
The company said that its SG&A expenses were $8.6 million in the first quarter of 2024, 15% lower than the same period in 2023, mostly as a result of cuts in overhead in the organization. Wages and benefits were $4.3 million in the quarter versus $4.7 million for the same period of 2023. The decrease in expenses was related to the streamlining of operations and support staff as a result of a more focused product portfolio.
The company reported that it maintained its leadership position in the Canadian cannabis market as the 6th largest licensed producer in Canada by total recreational sales while maintaining an industry-leading low-cost structure that resulted in another consecutive quarter of positive Adjusted EBITDA.
Looking ahead
Auxly is optimistic about summer demand increasing for its products and expects revenue to continue to grow. The company also stated that higher cultivation yields will continue to drive down operating costs.
