Growth appears to be starting to slow for Auxly Cannabis (TSX: XLY). The firm this morning reported its first quarter 2022 financial results, posting declines in revenue on a quarter over quarter basis.
Revenue for the first quarter amounted to $22.6 million on a net basis, down 22.9% on a quarter over quarter basis from the $29.3 million in net revenues posted in Q4 2021.
“Though this quarter presented some ongoing supply chain and operational challenges preventing us from meeting consumer demands for our branded cannabis products, we believe we have taken the necessary steps to correct these issues for the coming quarters, allowing us to increase fill rates and continue with our exciting new product launches throughout the year,” CEO Hugo Alves said on the financial results.
Cost of finished cannabis inventory sold amounted to $17.5 million for the three month period, while inventory impairments of $4.9 million and a biological asset impairment of $0.7 million resulted in the company posting a negative gross profit of $0.5 million before fair value items were factored in. Expenses themselves were near parity with net revenues at $22.5 million, lead by SG&A of $12.8 million.
Other expenses meanwhile continued the trend, with the company impairing long term assets to the tune of $12.9 million, as well as intangible assets and goodwill by $10.8 million. Overall, the company posted a net loss of $39.8 million. Adjusted EBITDA meanwhile amounted to negative $5.6 million, compared to negative $6.0 million in the fourth quarter.
Cash and cash equivalents for the quarter meanwhile improved from $14.8 million to $16.3 million.
Despite the poor quarter, the company remains confident that it can achieve adjusted EBITDA profitability in the current calendar year.
Auxly Cannabis last traded at $0.17 on the TSX.
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