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Wednesday, Jun 29, 2022
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


Sundial sees Q1 revenue slip 22% to $17.6M

Sundial’s EBITDA plummeted to a $0.7 million loss during Q1 2022 after $18.4 million during the previous quarter

Sundial stock jumps on Q3 earnings of $11M
In July, Sundial bought Spiritleaf in a deal valued at $131 million. Press photo

Canadian cannabis producer Sundial Growers Inc. (Nasdaq: SNDL) saw revenue decrease during the first quarter, mainly as a result of losses on the investment side.

On Monday, the Calgary-based company announced its financial results for the first quarter ended March 31.

Net revenue for the quarter was $17.6 million, down 22 per cent from $22.7 million during the fourth quarter but representing a year-over-year increase of 78 per cent compared to the first quarter of 2021.

Sundial reported its gross margin increased to $3.4 million in the first quarter, compared to a loss of $2.5 million during the previous quarter.

The company’s net loss improved to $38 million from $54.8 million during the fourth quarter of 2021. The figure also represented a 72 per cent year-over-year improvement after posting a net loss of $134.4 million net loss during the first quarter of 2021.

Read more: Sundial sees Q4 revenue jump 63% to $22.7M

Read more: Nova Cannabis’s board of directors, CEO resign as Sundial acquisition closes

“The first quarter of 2022 was both transformational and transitional for Sundial,” Sundial CEO Zach George said in a statement. “Through cost structure improvements in our cannabis operations, we have created a more balanced and diverse product mix that focuses on higher-margin, higher-quality cannabis.”

Sundial posted an adjusted EBITDA loss of $0.7 million for the quarter, a sharp decline after reporting adjusted EBITDA of $18.4 million during the previous quarter. The decline was attributed to central bank interest rate changes and fair value adjustments related to its SunStream joint venture.

Sundial Q1 2022 Financials

Chart via Sundial

Cannabis cultivation and production accounted for net revenue of $8.8 million during the first quarter, while cannabis retail saw a net revenue of $7.5 million. Revenue from investments accounted for a loss of $17.7 million, including unrealized losses on marketable securities of $17.8 million.

General and administrative expenses in the first quarter were $10.7 million, compared to $7.1 million for the three months ended March 31, 2021. The increase was attributed to increases in salaries and wages, as well as professional fees.

The company ended the quarter with $1 billion in cash, marketable securities, and long-term investments. As of May 13, the firm reported it had $361 million of unrestricted cash with no outstanding debt.

Read more: Sundial stock jumps on Q3 earnings of $11M

Read more: Sundial set to buy liquor and pot retailer Alcanna for $346M

Sundial completed its acquisition of Alcanna Inc. for $346 million on March 31, creating Canada’s largest private sector cannabis and liquor retail network.

Sundial operates cannabis shops under its Spiritleaf banner, while producing cannabis brands Topleaf, Sundial Cannabis, Palmetto and Grasslands.

“We are now Canada’s largest private sector distributor of both liquor and cannabis with 354 retail locations and have quickly benefitted from collaboration with our new legacy Alcanna colleagues,” George said.

Company stock was down 2 per cent Tuesday, trading at $0.46 on the Nasdaq.


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