Cronos Group (TSX: CRON) (NASDAQ: CRON) this morning reported its first quarter financial results, leaving investors yet again asking why this company has over a three billion dollar valuation. The company recorded revenues of $12.6 million, along with a net loss of $161.6 million.
Revenues were down 26% on a quarter over quarter basis, falling from $17.4 million in the fourth quarter to $12.6 million in the first quarter of 2021. The company also continued to demonstrate an inability to generate a gross profit, instead posting a gross loss of $2.9 million for the period – an improvement over the gross loss of $6.5 million posted a year ago.
Operating expenses meanwhile amounted to $40.5 million, with the company seeing $21.9 million in general and administrative expenses, or about $1.73 for every dollar of net revenue it earned. Sales and marketing meanwhile amounted to $10.3 million, followed by R&D expenditures of $5.1 million.
Other income provided a negative impact of $118.1 million, a result of a loss on derivative liabilities of $116.9 million, as well as $1.7 million in impairments on PPE by the company, offset marginally by interest income of $2.3 million.
Looking to the balance sheet, the company has continued to burn cash, with its cash and cash equivalents falling from $1.1 billion to $1.0 billion over the course of the quarter, a function of negative operating cash flows of $46.0 million, as well as finance cash flows of -$9.3 million and investing cash flows of -$9.7 million. Total current assets declined from $1.4 billion to $1.3 billion as the company continues to burn cash at an impressive rate.
Total current liabilities meanwhile climbed from $206.8 million to $302.6 million, a function of derivative liabilities climbing from $163.4 million to $272.3 million.
Cronos Group last traded at $9.26 on the TSX.
Information for this briefing was found via Sedar, Sedi and Cronos Group. The author has no securities or affiliations related to these organizations. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
