- Shares in MediPharm Labs (LABS) have taken a major hit today after the company reported an 88 per cent drop in year-over-year revenue
- Total revenue fell from C$43.4 million in the third quarter of 2019 to just $4.9 million this year
- The company also posted a net loss of more than $15.4 million this quarter compared to a profit of $5.39 million in the same period last year
- The poor performance was largely due to the oversupply in bulk crude resin and distillate markets, as well as with the impact of COVID-19
- MediPharm Labs is currently down 28 per cent to $0.54 per share
Shares in MediPharm Labs (LABS) have taken a major hit today after the company reported an 88 per cent drop in year-over-year revenue.
For the three months ending September 30, 2020, the Ontario-based cannabis company generated just C$4.9 million in revenue compared to almost $43.4 million in the same period last year.
The figure also pales in comparison to MediPharm's performance earlier this year, which saw total revenue of just over $11 million in the first quarter and $13.9 million in the second.
MediPharm says the decline is reflective of lower bulk extract volumes and average selling prices, but was partially offset by growth in the sales of formulated finished goods, which increased 30 per cent across Canada.
Any further slide in revenue was also avoided with an increase in international revenue, which totalled $700,000 following several agreements with customers in Australia, New Zealand and the United Kingdom.
All up, MediPharm posted a net loss of more than $15.4 million - a stark contrast to the profit of almost $5.4 million in 2019.
The company said this was largely due to a $6.3 million non-cash write down of inventory and a $1.5 million write down of non-current deposits given to vendors for capital expenditures.
"Economic conditions including the oversupply in the Canadian bulk crude resin and distillate markets, along with the impact of COVID-19, continue to challenge the industry," said Pat McCutcheon, CEO of MediPharm Labs.
"We are now focused on doing more to drive profitable revenue and address weaknesses including reducing our cost structure," he added.
Despite the underwhelming results, MediPharm is anticipating to grow from the start of next year, based on agreed customer production schedules. This is also expected to be bolstered by new sales of the company's LABS Cannabis products.
MediPharm Labs is currently down 28 per cent to $0.54 per share at 3:07pm EST.