Organigram Reports 16% YoY Revenue Drop But Kicks Off Year 'With A Bang,' Says CEO On Hundreds Of Millions In Tobacco Giant BAT Investment

Author: Jelena Martinovic | February 13, 2024 11:45am

Cannabis producer Organigram Holdings Inc. (NASDAQ:OGI) (TSX:OGI) announced its first quarter financial results on Tuesday for the three months ended Dec. 31, 2023.

The Toronto-based company reported a 16% year-over-year decrease in net revenue to CA$36.5 million ($27.1 million), attributing it to a reduction in international revenue and medical sales.

In November, the company announced a CA$124.6 million follow-on strategic equity investment from BT DE Investments Inc., a wholly-owned subsidiary of tobacco giant British American Tobacco p.l.c (NYSE:BTI). In January 2024, Organigram shareholders voted to approve the investment from BAT and the company completed the first of three tranches of the investment for proceeds of CA$41.5 million.

CEO Beena Goldenberg praised the deal with BAT.

"We certainly kicked off fiscal 2024 with a bang,” she said in a press release. "By closing the first tranche of our $124.6 million follow-on investment from BAT shortly after quarter end, we have removed a significant amount of risk from our business while enhancing the key competitive advantages that our team worked diligently to put into place in Fiscal 2023."

The investment allows Organigram to "fully leverage our world-class facilities, market leadership in several categories, and cutting-edge research and development capabilities to increase Organigram’s reach both within the Canadian market and beyond.”

BAT initially invested approximately CA$221 million into Organigram in March of 2021, which had served to propel product innovations resulting from CoE at the company’s Moncton facility.

Q1 2024 Financial Highlights

• Gross margin before fair value changes to biological assets, inventories sold, and other charges dropped to CA$9.5 million from CA$11.7 million in the first quarter of 2023.
• Selling, general and administrative expenses climbed to CA$16.5 million from CA$15.7 million in the first quarter of last year.
• Net loss amounted to CA$15.8 million compared to a net income of CA$5.3 million in the prior year's quarter.
• Adjusted EBITDA came in positive at roughly CA$135 000 compared to CA$5.6 million adjusted EBITDA gain in the corresponding period of 2023.
• Cash flow from operations was CA$7.7 million.
• International shipments totaled CA$1 million to Australia.

Now read: Organigram To Enter German Cannabis Market Via Sanity Group

OGI Price Action

Organigram's shares traded 8.1776% lower at $1.965 per share on Tuesday morning.

Posted In: BTI OGI TSX:OGI