Auxly Q1 Revenue Grows 6% YoY, Achieves First Quarter Of Positive Adjusted EBITDA

Auxly Cannabis Group Inc. CBWTF XLY released its financial results for the three months ended March 31, 2023, revealing net revenue of CA$24.0 million in Q1 2023, an increase of 6% compared to CA$22.6 million the same period in 2022.

Q1 2023 Highlights

• Gross profit of CA$7.9 million, an increase of CA$4.2 million as compared to the same period in 2022, which includes the impacts of non-cash impairments and fair value adjustments.

• Gross profit margin was 33% versus 16% in the same period of 2022.

• Net loss was CA$10.2 million, representing a net loss of CA$0.01 per share on a basic and diluted basis, compared to net loss of CA$39.8 million or CA$0.05 per share on a basic and diluted basis in Q1 2022.

• Adjusted EBITDA was positive CA$138,000, an improvement of CA$6.5 million over the same period of 2022, primarily as a result of improvements in net revenues and reduced costs of finished cannabis inventory sold and SG&A.

Hugo Alves, CEO of Auxly, stated: "We are very pleased to have achieved the company's first quarter of positive adjusted EBITDA. The results for the first quarter of 2023 continued to build upon the gains made in the fourth quarter of 2022, despite historical revenue headwinds in the first calendar quarter of the year. The shift in sales mix towards the dried flower and pre-roll products categories allowed us to better leverage Auxly Leamington's cost structure and contributed to further improvements in the cost of finished cannabis inventory sold margin to 37%. During the quarter we completed the full build-out of our new internal sales team, and we are working hard on increasing distribution and new sales channels. We are encouraged by our recent achievements and remain dedicated to delivering further improvements in financial performance. I want to thank our talented team members for their continued commitment to Auxly's success."

Outlook

The company’s goals for 2023 are broadly defined below:

• Increase net revenues by 15%, with a focus on key product categories, enhanced by strategic expansion of its product portfolio, while supporting strong retail distribution through its internal sales team.

• Continue to leverage Auxly Leamington's large-scale, low-cost cultivation facility and the company's manufacturing automation to increase blended cost of finished cannabis inventory sold margin to an average of 35-40%.

• Manage SG&A as a percentage of net revenues to keep it below 40%, further building upon savings realized in Q4 2022.

Photo by Richard T on Unsplash

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