CannTrust Holdings Inc. (TSX:TRST) generated year-over-year revenue growth of 99% in its second quarter
SmallCapPower | August 21, 2018: CannTrust Holdings Inc. (TSX:TRST) announced recently strong second-quarter financial results, with revenues jumping 99% YoY to a record $9.0 million, driven by a 122% rise in medical cannabis sales volume to 1,063 kg. Revenues from cannabis extracts increased 128% for the quarter, comprising 60% of total cannabis sales while those from dried cannabis rose 76% to $3.5 million. Its patient base more than doubled to over 45,000 at June 30, 2018 from 20,718 at June 30, 2017.
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Adjusted gross profit (including unrealized gains in fair value of biological assets) surged to $11.2 million for the second quarter 2018 compared to $3.9 million in the year-earlier quarter. Operating profit increased to $8.6 million versus $3.1 million. However net income declined to $0.1 million from $0.8 million due to deferred income tax expense of $4.3 million. For the six months ending June 2018, CannTrust Holdings reported net income of $11.5 million, or $0.12 per share, compared to a loss in the prior-year period.
Key operational highlights during the quarter included opening of the Niagara Perpetual Harvest 450,000 sq. ft. hydroponic greenhouse facility; launch of three new recreational brands (Liiv, Synr.g and Xscape); three recreational supply agreements in Western Canada to supply 17,000 kg of cannabis annually; and $100.0 million capital raise.
CannTrust Holdings CEO Eric Paul said, “We are very pleased with our Q2 results. We continued to experience dynamic growth in all areas of the Company as we execute our business plan aimed at being a market leader and innovator in the development of products and services to better serve our patients and physicians and to position us for the October 17th legalization of the adult use recreational market.”
Post the strong quarterly results, shares of CannTrust rose 3% on Tuesday and 14% on Wednesday to $7.77, before cooling off on Thursday to $7.47. CannTrust currently trades at a market cap of $819 million, or 30.4x its TTM sales of $25.5 million.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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