British Columbia producer Avant Brands reported record net revenue of 26.3 million Canadian dollars ($19.4 million) in the fiscal year ended Nov 30, 2023 from the sale of 7,105 kilograms (15,663 pounds) of cannabis.
That’s CA$6.2 million more than the CA$20.1 million in net revenue recorded in 2022 from the sale of 3,934 kilograms of cannabis, the company said in its annual financial results.
Avant attributed the increase primarily to impressive CA$1.4 million growth in recreational net sales and CA$5 million growth in international exports.
The record sales helped improve Avant’s net loss to CA$1.5 million for the year, 82% lower than fiscal 2022.
Cash flow from operations was a positive CA$5.4 million, a 256% increase over fiscal 2022.
However, a note from the company’s auditor accompanying its financial results highlighted a “material uncertainty” related to its ability to continue as a going concern.
The note said the company had incurred accumulated losses since its inception worth CA$65.9 million as of Nov. 30, 2023.
Avant’s losses have been primarily funded by the issuance of equity, convertible debentures, secured credit facility and advances from related parties, according to a regulatory filing.
“There is a material uncertainty related to these conditions that may cast significant doubt on the company’s ability to continue as a going concern and therefore, it may be unable to realize its assets and discharge its liabilities in the normal course of business,” the filing states.
A similar note appeared in Avant’s fiscal 2022 audited financial results: “The company’s ability to continue as a going concern depends upon its ability to generate profitable operations or raise adequate financing in the future.”
Avant’s recent financials reported a record year for adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).
Adjusted EBITDA was CA$4.4 million, representing a 132% increase compared to the previous fiscal year.
By revenue channel, Avant’s net sales in fiscal 2023 were:
- CA$15.8 million from recreational cannabis, 10% more than in 2022.
- CA$10.2 million in bulk cannabis, up approximately 50% over the previous year.
- CA$154,000 in medical cannabis, a 38% reduction compared to 2022.
- CA$147,000 in management fees and other revenue, down 45% from 2022.
Export revenue was CA$10.2 million, an all-time high for the business.
“We’re thrilled by the remarkable growth across all key financial metrics during fiscal year 2023, showcasing our dedication to strategic excellence and operational efficiency,” CEO Norton Singhavon said in a statement.
“The successful integration of the Flowr Group Okanagan sets the stage for even greater success in fiscal year 2024 and beyond, bolstering our expansion efforts and strengthening our position at a global scale.
Subsequent to the end of the fiscal year, Avant completed strategic loan restructuring agreements with Mena Investment Network and F-20 Developments Corp.
“These amendments enable Avant to reinvest our strong cash flow from operations into near-term strategic objectives,” Singhavon said.
Shares of Avant Brands trade on the Toronto Stock Exchange as AVNT.
