Zenabis Reports YOY Revenue Growth, Positive Adjusted EBITDA

Canadian cannabis company, Zenabis Global Inc. ZENA ZBISF released Wednesday its fourth-quarter and full-year financial results with full-year revenue of $59.3 million.

Full-Year Highlights

• Consolidated net revenue jumped 95% from the prior year.
• Consolidated adjusted EBITDA came in positive, at $3.5 million, which compares to an adjusted EBITDA loss of $38.7 million in 2019.
• Consolidated net loss amounted to $70.5 million or 13 cents per share, compared to $127.0 million or 53 cents per share in the prior year.
• The gross margin before fair value changes to biological assets and inventories was $24.8 million or 41.8% of net revenue, versus $13.7 million or 44.9% of net revenue in 2019.

Fourth-Quarter Highlights

• Quarterly consolidated net revenue was $15.9 million, up by 50% from $10.6 million in the fourth quarter of 2019.
• Consolidated adjusted EBITDA for the quarter amounted to $672,000, compared to an adjusted EBITDA loss of $11.2 million in the corresponding period of the prior year.
• The consolidated net loss was $30.2 million or $0.05 per share, which compares to $98.7 million or 34 cents per share in the same quarter of 2019.
• Gross margin before fair value changes to biological assets and inventories was $5.3 million or 33.3% of net revenue, versus $3.4 million or 32.1% in the fourth quarter of 2019.

2021 Outlook

Zenabis plans to concentrate on crucial activities and assets, while divesting non-core activities and monetizing non-core assets, like the sale of the Propagation segment and the Zenabis Delta facility.

Management sees more growth opportunities for the Canadian adult-use cannabis market, and expects shipments into export markets to restart during the second quarter, as the company responds to the new regulatory demands.

“We are pleased to report that Zenabis has completed a successful second year of operations with substantial growth in revenue and a much-improved balance sheet,” Shai Altman, Chief Executive Officer of Zenabis stated. 

“Net revenue increased 95% year-over-year with growth across all sales channels. Sales into the Canadian recreational market grew 78% as the recreational market grew during the year, but more importantly, the Company’s market share increased from 1.0% to 1.7%.  Sales in the  wholesale bulk channel also grew substantially by 242% year-over-year, due in large part to the Company’s entrée into export  markets, notably Israel and Australia, during the year.”

Back in February, HEXO Corp. HEXO HEXO confirmed it will acquire Zenabis for $235 million in an all-stock transaction.