Cronos Group Posts Gross Margins Of 6% In Third Quarter
Cronos Group (TSX: CRON) this morning continued to demonstrate how not to run a cannabis operation. The firm released its third quarter financial results, posting a net loss of $36.9 million.
The results were toplined by declining sales, which fell 9.2% to $20.9 million from the second quarters $23.1 million. The firms US segment saw its revenues fall from $1.5 million to just $0.5 million, while cost of sales for the segment hit $2.5 million. Rest of World meanwhile saw net revenues of $20.4 million, with cost of sales hitting $17.3 million, resulting in gross margins of just 15%.
On a combined basis, cost of sales totaled $19.8 million, resulting in gross margins of just 6%. No inventory write-downs were conducted during the quarter.
READ: Cronos Pays OSC $1.3 Million As Penalty For Accounting Fraud, Settles SEC Charges
Operating expenses meanwhile hit $32.2 million for the three month period, with General and Administrative expenses accounting for $17.2 million of that figure, while Sales and Marketing totaled $5.9 million.
After other expenses of $3.8 million, which includes an impairment on investments of $28.9 million that was offset by a gain on revaluation of $17.0 million and a further $7.2 million in interest income, the company posted a net loss of $36.9 million. The firms comprehensive loss however, which includes a $60.7 million foreign exchange loss, amounted to $97.5 million. Adjusted EBITDA meanwhile came in at a loss of $21.7 million.
Cash and cash equivalents meanwhile came in at $633.3 million as of quarter end, a decline from $789.5 million as of the end of the second quarter. However, short term investments climbed from $155.4 million to $255.5 million during the quarter.
Cronos Group last traded at $4.15 on the TSX.
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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.
