The Valens Company announces company results of Q4
March 1, 2022 By Grow Opportunity staff
The Valens Company Inc. has reported its fourth quarter and fiscal year financial results for the period ended Nov. 30, 2021.
The company’s net revenue of CA$18.4 million in Q4 2021 and CA$78.2 million in fiscal year 2021, represents a decrease of 12.3 per cent compared to Q3 2021. However, despite a decrease in net revenue quarter-over-quarter, adjusted gross profit increased by 9.1 per cent to CA$6.3 million from CA$5.7 million in Q3 2021.
Provincial sales increased by 31.7 per cent to CA$7.9 million from CA$6.0 million in Q3 2021. Valens’ branded products represent the majority of these sales, which are expected to increase in the coming quarters as the listings we achieved in 2021 begin to meaningfully contribute to market share and revenue gains.
The company’s business to business (B2B) saw a decline of 53.9 per cent in Q4 2021 to CA$4.1 million from CA$8.9 million in Q3 2021, as Valens aggressively moved to align with the ‘fewer, bigger, better’ strategy in anticipation of continued headwinds for smaller, undercapitalized cannabis companies in 2022.
“This quarter showcases the progress we have made in our business plan in key areas despite a competitive and challenging operating environment in Canada and globally. Net revenue slightly declined quarter-over-quarter as we completed the transition of our (B2B business to align with the ‘fewer, bigger, better’ strategy and was negatively impacted by the floods in British Columbia (B.C.), which resulted in supply chain disruptions,” said Tyler Robson, CEO, co-founder, and chair of The Valens Company. “However, in our two key revenue segments, we are very pleased with the industry leading growth in provincial sales revenue and the full quarter revenue generated by our Green Roads US CBD business. With the B2B transition largely behind us, we expect to have more sustained growth in 2022.”
Robson continued to highlight some of the company’s bright spots throughout the quarter, including Valens’ adjusted gross profit margin, which saw an increase from 27.4 per cent in Q3 2021, to 34.1 per cent in Q4 2021. “Additionally, I am very proud of our operations and logistics teams which have had to deal with a significant business transition over 2021 as well as automation delays, inflationary cost pressures, supply chain disruptions, and the flooding in British Columbia. With further automation and our recently announced integration initiative, we are now heading down the path towards profitability. This supports our confidence and commitment to achieving both positive adjusted EBITDA by Q4 2022 and our revenue guidance for 2023 of at least $225 million.”
Looking toward the upcoming months of 2022, Valens’ key objectives for the year include:
• Vapes, edibles, and beverages – the company looks to become a top-five player in Canada
• Flower products – Valens looks to become a top-10 player in Canada
• Gross margin improvement and positive EBITDA by Q4
• Further entry into the U.S. market as permissible with federal regulations
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