TGOD stock is under pressure this morning after The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF) reported increased losses in the fourth quarter.
Higher Losses Due to Impairment Charges
The Green Organic Dutchman has been one of the major players in the cannabis market for quite some time, and late Tuesday, the company announced that it generated revenue of $11.16 in 2019. More importantly, TGOD expects its sales momentum to continue in 2020. The company also announced that sales in Europe rose across its whole range of product lines.
In comparison to Europe, fourth-quarter sales in Canada rose only slightly, mostly because of limited production at the Ancaster property. Revenue for the fourth quarter stood at $3.25 million, while net losses for the quarter came in at $144.75 million.
The net losses for the year stood at $195.75 million, and that also included the $127.74 million impairment charge for the fourth quarter. The charges in question are related to some of the cash-generating assets that are currently being built by The Green Organic Dutchman in Canada.
TGOD stock is one of the biggest losers in the cannabis sector, with a fall of 18% to C$0.36.
The company stated that these charges have incurred due to the present state of the market. Like many other cannabis companies, The Green Organic Dutchman went on an aggressive acquisition spree in the early stages of the cannabis industry, which later led to some financial issues. TGOD stock tanked by as much as 90% over the past year, and eventually, the company was forced to put its Ancaster location on sale.
TGOD was able, however, to work out a sale and leaseback deal for the facility, providing the company with $23 million to complete construction. This hasn’t solved all of The Green Organic Dutchman’s issues, though. Due to market conditions, TGOD has revised its growth targets for both the near-term and the long-term.
What do you think about TGOD stock right now?
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