CannTrust Holdings Inc. (NYSE: CTST) reported its first quarter financial results before the market open on Tuesday. The cannabis-based company surpassed earnings estimates and delivered an unexpected profitable quarter, causing shares to rise by 6.4% shortly after the opening bell.
For the quarter, CannTrust reported earnings of USD 0.12 per share on revenue of USD 12.5 Million. FactSet analysts estimates earnings loss of USD 0.05 per share on revenue of USD 12.76 Million.
Despite missing analysts’ revenue estimates, CannTrust witnessed a 115% increase in quarterly revenue year-over-year. The Company reported that 67% of the revenue was delivered through its medical channel and 33% through its recreational channel.
Within the quarter, CannTrust reached a total active patient count of 68,000, a 70% increase year-over-year.
CannTrust’s harvested production increased by more than 400% to 9,400kg compared to the same quarter a year prior. The Company sold 3,000kg of dried cannabis equivalent in the quarter, a nearly 200% increase over the year prior, at an average net price of CAD 5.47 per gram.
“The CannTrust team delivered exceptional operational growth in the first quarter, with harvested production of over 9,400kg. This is a 96% increase in production over the prior quarter and reflects the impact of the investments made into our facilities, as well as process improvements to increase throughput,” said Peter Aceto, Chief Executive Officer.
Cost of sales per gram sold and cash cost per gram sold were CAD 3.03 and CAD 2.77, respectively, compared to CAD 3.08 and CAD 2.94, respectively, in the fourth quarter of 2018.
Looking ahead, CannTrust expects to continue to make investments in order to expand the Company both domestically and internationally. The Company is potentially looking to expand towards vape pens, beverages, confectionaries, and healthcare products.
As a result of CannTrust’s investments, the Company believes that its 2019 revenue will be “significantly” higher than its 2018 financial results. CannTrust said it expects primary growth acceleration during its second quarter.
“Our fully-permitted Phase 2 expansion is expected to reach its full capacity of 50,000kg on an annual basis in the third quarter of 2019, and our 81 acres of land for outdoor cultivation has been prepared and we are awaiting regulatory approval to start planting. We have commenced work on our Phase 3 expansion in Niagara, which we expect will add a further 50,000kg of annual capacity. All told, we continue to expect to exit 2020 at a production rate of between 200,000kg to 300,000kg per year. This is a very exciting time for CannTrust and we plan to continue executing on our vision of becoming a global provider of innovative cannabis products and brands,” concluded Mr. Aceto.