Aleafia Sees Revenue Decline In 2021

The results are in for Aleafia Health (TSX: AH) and it appears the company had a rather disappointing fourth quarter. Revenues for the quarter declined on both a year over year and quarter over quarter basis, to $8.8 million.

Revenue for the quarter was down from $15.2 million in the year ago period, while also down from $9.6 million in the prior quarter. The decline was blamed by the company on shifting from low margin bulk wholesale product, to higher margin branded products.

Things got no better from here, with the firm posting $2.3 million in gross profits before inventory writedowns and fair value changes. Writedowns for the quarter amounted to $17.3 million, putting the firms gross loss deep into the red at $21.6 million, once fair value adjustments are also taken into consideration. Comparatively the company posted a gross loss of $3.5 million before fair value adjustments in the third quarter.

Expenses added to the losses, with a total $10.1 million in operating expenses, lead by wages and benefits of $4.0 million. Other expenses then added a further $39.8 million in losses to the mix, lead by impairments of property plant and equipment to the tune of $28.8 million.

Aleafia overall posted a loss of $71.5 million for the three month period ended December 31, compared to a net loss of $82.9 million in the third quarter. Adjusted EBITDA meanwhile came in at negative 2.4 million.

For the full fiscal year, revenue declined from $44.5 million to $36.1 million on a net basis, with the firms gross profit before fair value adjustments falling from $22.5 million to $8.2 million. With expenses of $53.2 million and other expenses of $103.4 million, the company posted an overall net loss of $165.7 million, compared to a loss of $247.2 million in 2020. Adjusted EBITDA for the year meanwhile was negative $17.6 million.

Looking to the balance sheet, the company currently has cash of $11.2 million, up from $4.7 million in the third quarter, while overall current assets fell from $69.9 million to $50.0 million through the quarter. Accounts payable meanwhile rose to $23.6 million, with current liabilities climbing from $65.8 million to $71.4 million.

Aleafia Health last traded at $0.14 on the TSX.

Information for this briefing was found via Sedar and Aleafia Health. The author has no affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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