Auxly Cannabis (TSX: XLY) is seemingly doing the impossible – grabbing marketshare in an increasingly fragmented Canadian cannabis market. The company this morning reported revenues of $20.9 million for the quarter ended June 30, while posting a positive net income of $8.7 million.
Revenues were up significantly on both a quarter over quarter and year over year basis. Comparatively, the firm posted $6.9 million in revenues for the year ago period, and $10.0 million in the prior quarter. The improvement was largely justified simply by increased demand from consumers at retail cannabis locations across the country and improvement in provincial customers inventory purchases.
Gross profits appear to be the biggest gainer after revenue growth, with gross profit growing to $7.7 million before fair value adjustments, compared to $2.1 million in the first quarter. Expenses however still came in higher than gross profits at $19.0 million, lead by selling general and administrative expenses at $12.1 million and interest expenses of $4.8 million.
The company did receive a slight boost however from other income of $3.1 million, despite an $11.4 million impairment of long term assets, which was offset by $17.0 million in gains from settlements of assets and liabilities and other expenses. Overall, the company posted a net income of $8.7 million, thanks to a boost of $12.3 million in income from discontinued operations, including the sale of KGK Sciences.
Adjusted EBITDA during the quarter amounted to negative $3.3 million.
The company reported an improvement in overall cannabis market share to 4.9% for the quarter, including a 15.4% market share in 2.0 products.
Auxly Cannabis last traded at $0.23 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or 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.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.