Auxly stock continues to move lower this week after Auxly Cannabis Group (TSXV:XLY) (OTCQX:CBWTF) reported disappointing third-quarter results last week.
There was widespread hope that there would be some reprieve for the troubled cannabis sector during the earnings season, but it did not come to pass, as many companies reported disappointing results. Auxly Cannabis announced its third-quarter financial results on November 21, and they proved to be a disappointment as well.
On the day, Auxly stock crashed by as much as 5.50%. The company's revenue grew by as much as 97.68% year-on-year; however, it shrunk by a massive 41.45% from the previous quarter.
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When considering the net revenue for the first nine months of 2019, Auxly Cannabis Group managed to generate growth of 535.21% as it hit $5.20 million CAD. Out of that, $4.34 million CAD was made up of research contracts, while cannabis sales made up $115,000 CAD. The loss per share for the quarter stood at $0.30 CAD, which reflected a rise of as much as 50% from the prior-year period.
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Auxly stock is down 2.50% at $0.64 CAD.
On the other hand, the company stated that it is ready to enter the Canadian derivatives market soon. It expects to sell its derivative products all over Canada, with the exception of Quebec.
Despite the overall grim performance in the third quarter, Auxly Cannabis Group stated that its revenue will rise from December onwards and continue on the same trajectory in 2020. Better retail networks, the growth of derivative products, and a growing consumer pool have been cited as factors behind the possible rebound.
As an aside, the company also made a presentation of its production capabilities. It has projected 100,000 kgs in annual cannabis output from its product portfolio. It is also working on a range of interesting projects. In addition, Auxly is working on creating cannabis flower brands through its Robinson’s Outdoor Grow Project and its fully-owned subsidiary Kolab Project.
Auxly stock has slumped 30% so far this year.
Featured image: Canva
