Cronos Group (TSX: CRON) appears to be finally taking steps to address its absolute lack of ability to generate any sense of positive income. The firm this morning as part of its fourth quarter financial results announced that it will be closing its Peace Naturals facility in Stayner, Ontario.
The closure is expected to be completed by the end of 2022, with the entire campus to be sold off. The company during the fourth quarter recognized a $119.9 million impairment as a result of the decision, with an additional $4.5 million in charges to come. Going forward, the company intends to use its Cronos GrowCo joint venture and contract growers to supply its needs for the Canadian market.
R&D initiatives, including product development, are expected to to “continue across multiple facilities available to Cronos,” with further details not provided.
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In terms of fourth quarter results, the company saw its revenue grow to $25.8 million, up from $20.4 million in the third quarter. Cost of sales came in at $23.9 million, resulting in gross profits of just $1.9 million for the three month period. Net losses for the quarter meanwhile amounted to $133.9 million.
For the full fiscal year, the company saw total net revenues of $74.4 million, along with a cost of sales of $80.0 million, as well as inventory write-downs of $12.0 million, leading to a negative gross profit of $17.5 million for the full year. Operating expenses meanwhile amounted to $543.1 million, lead by impairments to the tune of $383.7 million, as well as general and administrative expenses of $96.5 million.
After positive other income, a result of a $151.4 million gain on revaluation of derivative liabilities, the company posted a net loss of $397.2 million for the full fiscal year.
The company as of December 31 reported a cash position of $887.0 million, as well as short term investments of $117.7 million. Total current assets amounted to $1,079.7 million, while total current liabilities amounted to $54.4 million.
Cronos Group last traded at $4.55 on the TSX.
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