Benzinga | Aug 16, 2021 12:55PM EDT

Auxly Q2 Revenue Triples Hitting CA$20.9M With Cannabis 2.0 Product Sales Accounting For 75%

Auxly Cannabis Group Inc. (TSX.V - XLY) (OTCQX: CBWTF) released its second-quarter financial results with total adult-use cannabis sales in Canada of CA$20.9 million ($16.62 million) compared to CA$6.87 million in the same quarter of last year. The net revenue figures comprised of around 75% cannabis 2.0 products sales and about 25% from cannabis 1.0 product sales.

Second Quarter Financial Highlights

* Adjusted EBITDA improves to negative CA$3.3 million, an improvement of CA$7.2 million as compared to Q2 2020 and CA$3.4 million more than the previous quarter;

* Auxly realized a gross profit of CA$8.0 million resulting in a 38% margin during the three months ended June 30, 2021, compared to CA$1.4 million (19%) during the same period in 2020;

* Net income attributable to shareholders of the Company was CA$8.7 million for the three months ended June 30, 2021, representing a net income of CA$0.01 per share on a basic and diluted basis;

* SG&A expenses were CA$12.1 million during the second quarter and CA$21.3 million years to date 2021, a decrease of CA$1.5 million and CA$5.1 million as compared to the same periods in 2020.

"We are thrilled to report a record quarter for Auxly where we saw significant growth in our net revenue, adjusted EBITDA, and our share of the recreational cannabis market," Hugo Alves CEO of Auxly, stated. "We continued to hold the #1 spot in Cannabis 2.0 Product sales nationally, through our leadership in the vapor segment and consumer-driven innovations in new product categories such as concentrates. We look forward to launching new and exciting products for consumers to enjoy as we continue to execute against our objectives in 2021."

Outlook

In 2021, Auxly is focused on building upon its success as a market leader in Cannabis 2.0 products, while continuing to advance the Company's focused expansion of its dried flower, pre-rolls, oil and capsule product offerings. The Company's overall objectives for 2021, which may be impacted by the COVID-19 pandemic (see further discussion in the MD&A under "COVID-19 Pandemic"), are as follows:

* Continued leadership and strength in the Cannabis 2.0 Products market;

* Focused expansion of Cannabis 1.0 Products;

* Become a top 5 licensed producer in Canada by total market share in adult recreational cannabis sales;

* Continue to take measures to improve cash flows and finance the business;

* Become Adjusted EBITDA positive by the end of the calendar year;

* Leverage the Sunens facility to establish a secure supply of cannabis and reduce reliance on open market purchasing; and

* Explore possible cannabis market entry strategies in regulated international markets, on an asset-light basis.

Price Action

Auxly's shares were trading 4.87% higher at 20 cents per share at the time of writing Monday morning.

Photo: Courtesy of Esteban Lopez on Unsplash