HEXO Corp. (TSX: HEXO; NYSE: HEXO) reported a wider net loss for the first quarter, despite generating revenues that more than doubled from last year. The company’s stock declined during the pre-market session on Monday.
The Canada-based cannabis firm posted a net loss of C$62.4 million or C$0.24 per share for the first three months of fiscal 2020, compared to a loss of C$12.8 million or C$0.07 per share in the same period of last year. Adjusted EBITDA was a loss of C$24.6 million during the quarter, wider than last year’s loss of C$10.5 million.
Net revenue from sales more than doubled annually to C$14.5 million. Gross cannabis revenue was C$19.3 million, higher than C$6.6 million recorded a year earlier. There was a sharp increase in adult-use grams and gram equivalents to 4,196 kg.
The company, meanwhile, said it realized the lowest ever harvest yields in the first quarter due to the impact of the late summer climate.
Looking ahead, HEXO expects to be EBITDA-positive in calendar 2020, after considering certain assumptions regarding store count, operational improvements and cost-saving initiatives.
“Cost control combined with our multi-brand approach, an updated strain mix, as well as the introduction of new products, will help us increase our market share and total revenue, leading us towards great results in 2020. I am more confident than ever in our ability to continue down this path and to pivot with more speed and assertiveness should market conditions evolve again,” said CEO Sebastien St-Louis.
Additionally, the management revealed the closure of private placement of 8% unsecured convertible debentures in the first week of December, for gross aggregate proceeds of $70 million.
Hexo shares, which have been losing steadily for several months, slipped to an all-time low last month. They lost 70% since the beginning of the year and 56% in the past twelve months. The stock fell about 8% early Monday, soon after the earnings announcement.