Multinational cannabis operator Khiron Life Sciences Corp. (TSXV: KHRN) (OTCQX: KHRNF) (Frankfurt: A2JMZC) continues to expand its revenue thanks to its operations in Latin America and Europe.
On Tuesday, the Toronto-based company with major operations in Colombia publicized its first-quarter results ended March 31 and saw a 28 per cent growth in net revenue to $4.6 million from $3.6 million in the previous quarter.
According to Khiron, continued expansion throughout Colombia and growth within Europe are responsible for the extensive monetary development this quarter.
Khiron also set record revenue figures for its medical cannabis category where it reported $2.6 million worth of medical products in Q1 this year – a 32 per cent increase from $1.97 million in the previous quarter.
The rapid growth in their medical cannabis revenue appears to have occurred during the first three quarters of last year, as there has only been a 38 per cent increase since the start of the Q4 in 2021.
It is also noteworthy that 53 per cent of all medical cannabis revenue was attributed to the European market – primarily the United Kingdom and Germany. This March, the company exceeded $1 million in medical product revenue alone. The U.K. also solely generated over $1 million during Q1 this year.
Net cash used in operating activities totalled $2.8 million at the end of this quarter, a 45.7 per cent decrease from 5.16 million in the previous quarter. Adjusted earnings before interest, taxes and depreciation were negative $3 million from negative $5.6 million in the fourth quarter last year. The total cash amount for the company at the end of Q1 was $5.1 million.
The company announced on Tuesday that they would be entering into an agreement to obtain Pharmadrug GmbH, a subsidiary of PharmaDrug Inc. (CSE:PHRX) (OTC:LMLLF). The agreement between the companies states that Khiron will receive 100 per cent of Pharmadrug shares for a promissory note issued at closing, and 5.5 million Khiron shares at $0.16 a piece.
Earlier this year Khiron also partnered with Fundación Teletón, the largest non-profit in Mexico for children with disabilities. The partnership with help bring medical cannabis to over 24 medical facilities across Mexico.
Gross profit prior to fair value adjustments also grew by 96 per cent since the first quarter of last year, resulting in a $2.1 million increase. This escalation in revenue can be primarily attributed to their 75 per cent gross margin in medical cannabis, compared to only 49 per cent in the fourth quarter of last year.
Q1 marks the seventh consecutive quarter of uninterrupted financial growth for the medical cannabis segment of the organization. This fundamental portion of the company now accounts for 92 per cent of gross profit and 57 per cent of corporate revenue.
At the end of this quarter, Khiron had $37.6 million in total assets. $9.4 million was attributed to buildings and real estate, $8.1 million to high-grade cannabis inventory and only $0.8 million in financial debt.
“Our unique approach will continue to generate double-digit revenue and gross profits quarter over quarter in markets poised to become significant in the coming years.” CEO Alvaro Torres said in a statement.
“Our focus is to leverage the infrastructure we have built to continue driving sales in our target markets while maintaining discipline in our expenses so we can achieve profitability in the near future, and then continue to look for more growth opportunities in Latin America and Europe.” He continued.
Company stock increased by 14.29 per cent on Wednesday, sitting at C$0.20 on the Canadian Ventures Exchange.