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Auxly shares sink as company reports wider 4Q financial loss as costs rise

Shares of the cannabis company sank double-digits after it released its quarterly and annual financial results

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For the fourth quarter, Auxly reported a net loss of C$34.8 million against a net loss in the year-ago period of C$9.2 million

Auxly Cannabis Group Inc (CVE:XLY) (OTCMKTS:CBWTF) saw its stock trip and stumble on Friday after the cannabis company reported its fiscal fourth-quarter and annual earnings. 

The company, which has operations across Canada and Uruguay, reported a net loss of C$66.9 million, or $0.14 per share for the year ended December 31, 2018. This compares to a net loss of C$18.2 million, or $0.11 per share for the year ended December 31, 2017.

Shares of the Vancouver-based cannabis company closed down 11.3% at C$0.86 in Toronto and down 9.3% at US$0.65 in New York.

READ: Buds & Duds: Cannabis stocks cruise into the weekend; Auxly tumbles on disappointing earnings

The company said the loss was primarily driven by an increase in expenses. 

For the fourth quarter, Auxly reported a net loss of C$34.8 million, or C$0.06 a share, against a net loss in the year-ago period of C$9.2 million, or C$0.04 a share. 

There were no reported analyst estimates for the company.

“2018 was an important year for us, as we made substantial progress towards our objective to become a vertically integrated cannabis company," said CEO and Chairman Chuck Rifici in a statement. "We were successful in building a diverse and robust cultivation pipeline, have made progress on adding value through the research and development of derivative cannabis products through Dosecann, and expanded our distribution channels for bringing cannabis products to market."

READ: Charlotte's Web Holdings reaps benefits of hemp legalization in 4Q

"We added key strategic assets and partnerships to our portfolio, have over $200 million of cash and cash equivalents, and are well positioned to execute on our objectives for this year," he added. 

The company posted 2018 annual revenues of C$747 million, with C$647 million of that coming in the fourth quarter of 2018. The company posted no revenue in 2017.

Auxly’s current revenues are primarily as a result of the acquisition of contract researcher KGK in Q3 2018.

--updates share price--

Contact Katie Lewis at [email protected]

Quick facts: Auxly Cannabis Group Inc

Price: 0.22 CAD

TSX-V:XLY
Market: TSX-V
Market Cap: $139.03 m
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