Canadian Cannabis Co. Entourage Health Q3 Revenue Slides 8.8% YoY - But Margins Sore, Losses Decline

Author: Nina Zdinjak | November 28, 2023 11:32am

Entourage Health Corp. (TSXV:ENTG) (OTCQX:ETRGF) (FSE:4WE), a Canadian cannabis company, reported Tuesday its financial results for the third quarter, revealing revenue of CA$12.2 million ($8.97 million), down by 8.8% from CA$13.4 million in the same quarter last year.

"I am proud to announce the strategic initiatives we've undertaken to drive cost reduction, enhance profitability, and strengthen our balance sheet over the past year," stated George Scorsis, CEO and chair of Entourage. "Through the consolidation of operations and the integration of advanced automation, we have not only achieved heightened efficiency but also experienced improvement in our overall financial performance. In the face of challenges within the Canadian cannabis sector, our Q3 performance reinforces our strategy, marking a pivotal moment in the ongoing narrative of Entourage’s success."

Q3 2023 Financial Summary

Gross profit was CA$2.44 million, compared to a gross loss of CA$5.96 million. This growth can be attributed to a strategic focus on operational efficiencies bolstered by reduced inventory write-downs in Q3 2023.
Net loss amounted to CA$9.9 million, which compares to a loss of CA$17.43 million in the same period of 2022.
Gross margins rose to 27%, a significant improvement from the (49%) recorded in Q3 2022. This enhancement is primarily due to increased automation in producing finished and semi-finished goods, which lowered direct labor costs and contributed to improved margins compared to the same period last year.
Total cost of goods sold decreased by CA$8.6 million or 58% to $6.4 million for the three months ending September 30, 2023, compared to Q3 2022. This reduction was achieved by continued efforts to optimize our operational platform and further automation initiatives.
Selling, general, and administrative expenses declined 11.6% to CA$6.05 million. This change was primarily related to the Company’s focus on reducing departmental inefficiencies and reducing headcount.
Adjusted EBITDA came in negative. A loss of CA$4.5 million compared to a loss of CA$2.9 million in Q3 2022.

Vaani Maharaj, CFO of Entourage, commented, “Throughout the year, we’ve been proactive in our approach, implementing strategic measures such as the realignment of our product portfolio. By consistently evaluating performance, market demand, and product pricing, we are demonstrating agility in the industry. Although this quarter saw a revenue decline in adult-use the measures we have implemented are instrumental in fortifying our financial resilience and positioning us for sustained growth.”

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Posted In: ETRGF TSXV:ENTG