- Zenabis Global (TSX:ZENA), has reported an 850 per cent increase in consolidated revenue for the year ending December 31, 2019
- Consolidated margins were down slightly to 34.2 per cent from 35.1 per cent the year before
- However, net loss was reportedly C$127 million, compared to $32.5 million in 2018
- Earlier this year, Zenabis downsized its workforce, facilities and offices in Vancouver, reducing costs by approximately $2 million per quarter
- Zenabis Global (ZENA) is down 14.29 per cent to 9 cents per share, with a market cap of $31.29 million
Despite an 850 per cent increase in net revenue for 2019, Zenabis Global (TSX:ZENA) has failed to turn a profit.
The Canadian cultivator of cannabis, floral, and vegetable products has established operations from coast to coast. With sites in New Brunswick, British Columbia, and Nova Scotia, Zenabis owns approximately 3.5 million square feet of facility space.
In 2018, the company reported consolidated net revenue of C$7 million. However, the year ending December 31, 2019 saw a significant increase to $66.5 million.
The marked improvement came even in the face of slightly lower consolidated gross margins, from 35.1 per cent in 2018 to 34.2 per cent in 2019.
Despite the increase in revenue, Zenabis was still unable to reach cash flow positivity. Net loss for 2019 was reportedly $127 million, compared to $32.5 million the year before.
No specific reasons were given for the increases in both net revenue and loss. However, Zenabis’ CEO, Kevin Croft, noted the substantial completion of the company’s facility build-out.
“For 2020, the company has pivoted from a facility construction focus to focusing on operational excellence as a consumer packaged goods company.
“With significant capital expenditures behind us, as well as recently announced cost reduction measures and opportunities to realise additional efficiencies, we feel confident that 2020 will be successful for Zenabis,” he added.
In order to reach cash flow positivity in 2020, Zenabis also announced a review of operational processes, and subsequently implemented cost-cutting measures.
On example, Zenabis said, is the “rightsizing” of its workforce at its Vancouver-based facilities and head office. These measures alone will save approximately $2 million each quarter.
In addition, construction activities at various sites have been largely completed, and ongoing capital expenditures have been curtailed.
Zenabis Global (TSX:ZENA) is currently down 14.29 per cent to 9 cents per share at 10:13am EST.