Despite continued growth in topline revenue, positive net income continues to evade Auxly Cannabis (TSX: XLY). The firm this morning posted its second quarter financing results, indicated that its revenue had climbed a substantial 20.8% on a sequential basis.
Revenues for the second quarter came in at $27.3 million, an improvement over the $22.6 million reported in the first quarter of the year. Cost of sales however came in at $20.6 million, with inventory impairments adding a further $1.8 million to production costs, resulting in a gross profit of $5.0 million before fair value adjustments.
“With an increasingly competitive market, we have been able to maintain our position as the #1 LP in cannabis 2.0 sales, driven by our leadership position in the vapour category where we ended the first half of the year as the #1 LP in the category with over 17% share of market. We successfully increased revenues and gross profits during the quarter while maintaining our SG&A spending largely flat,” commented CEO Hugo Alves.
At the same time, expenses nearly matched net revenues at $25.1 million, lead by SG&A expenses of $12.9 million and interest and accretion expenses of $5.3 million. Other income of $0.9 million attempted to offset some of those expenses to little effect.
Overall, the company posted a net loss of $14.3 million for the quarter, while adjusted EBITDA came in at negative $4.0 million. Comparatively, the firm had a net loss of $39.8 million in the first quarter, and negative adjusted EBITDA of $5.6 million.
Cash and cash equivalents meanwhile came in at $20.4 million, versus $16.3 million at the end of the first quarter, with total current assets sitting at $118.3 million. Accounts payable meanwhile presently sits at $32.0 million, while total current liabilities amounts to $46.9 million.
“As we enter the second half of 2022, we will continue to focus on cost control and margin enhancement through continue process improvements and investments in automation to further support our key objective of Adjusted EBITDA profitability in 2022,” said Alves.
Auxly Cannabis last traded at $0.075 on the TSX.
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