Late on Wednesday, HEXO Corp (TSX: HEXO; NYSE-A: HEXO) reported a basic net loss per share that widened to CAD 0.04 in the third quarter of 2019, from CAD 0.01 per share a year ago, weighed down by higher operating expenses and taxes.
HEXO ended its extended trading down 0.78% on Wednesday.
Total net sales jumped to CAD 13 million (~$9.75 million), from just about CAD 1.2 million in the same quarter last year, helped by increased adult use sales. Analysts were expecting revenues of $10.96 million.
In the third quarter, adult-use sales accounted for 91% of total revenue. Meanwhile, in the medical segment, net revenues declined 7% to CAD 1.09 million, due to overall weakness in medical sales.
CEO Sebastien St-Louis said, “This quarter saw HEXO remain on-track as it continues ramping up to $400 million in revenue in fiscal 2020, including completing the first harvest in our 1 million sq. ft. Expansion and preparing to fund our ongoing expansion projects and innovation initiatives by entering a $65 million syndicated credit facility.”
The Canadian cannabis company said it produced 9,804 kg of dried cannabis, an increase of 98% over the previous quarter. It also completed first harvests in new 1,000,000 sq. ft. expansion as it continues ramping up to annual production capacity of 150,000 kg of dried cannabis.
The company completed the acquisition of Newstrike Brands in May. Earlier in March, HEXO entered into an agreement to acquire Newstrike for CAD$263 million. Following this acquisition, HEXO estimates fiscal 2020 net and gross revenues from the sale of cannabis in Canada to be over CAD$400 million and CAD$479 million, respectively.
Last month, HEXO formalized its US presence by appointing Michael Monahan as CFO and establishing HEXO USA Inc. in Delaware. The company also named Donald Courtney as its Chief Operating Officer in May. With the passing of the Farm Bill to allow CBD extraction from hemp, HEXO Corp is confident of seizing a significant portion of market share in the US.
HEXO’s shares have advanced 23% from January 23, 2019, the date which the company started trading on the NYSE American. HEXO stock closed down 2.86% at $6.45 today.