Wed, April 24, 2024 at 9:35 AM EDT
Business
Organigram net revenues more than double to $25.2 million in first quarter – Article – BNN – BNNBloomberg.ca
Organigram Holdings Inc. is anticipating that consumers seeking non-smokable cannabis will help to further boost its revenues that more than doubled to $25.2 million in the first quarter.
The company based in Moncton, N.B., says revenues were up from $12.4 million a year earlier.
Chief executive Greg Engel foresees tremendous opportunities ahead as demand for vapes, chocolates and powdered products accelerates in the coming months.
“The feedback we’re hearing from the retailers is that the consumer that’s coming in today, many of them are consumers who have not come into retail stores because they don’t want to look for a dried flower product in the past,” he said in an interview.
That should translate into new revenues as between 40 to 45 per cent of sales should come from these Rec 2.0 products, according to results in U.S. states.
The first vape pens were shipped as planned in December while premium cannabis-infused chocolates are to begin sales later in the quarter.
Sales of powdered products, to be added to a consumer’s beverage of choice, are expected in the second quarter.
Engel declined to provide specific dates for the launch of these products but said one large unnamed province has already tripled its order for cannabis-infused chocolates.
“There’s a tremendous amount of opportunities with 2.0 products. It’s going to expand the market dramatically.”
Revenues during the first quarter included $16.7 million of sales to the adult-use recreational market and about $9.5 million to medical markets, partly offset by a $1.1 million provision for product returns and price adjustments.
The provision related to two slow-selling products sold to the Ontario Cannabis Store – a lower THC dried flower and THC oils.
Organigram’s net loss was $863,000 or less than a cent per share, compared with a loss of $29.5 million or 19.5 cents per share in the prior year. That large loss was largely due to non-cash fair value changes to biological assets and inventories.
The cannabis producer was expected to lose $3.9 million or three cents per share on $19.6 million in revenues, according to financial markets data firm Refinitiv.
Engel said he’s pleased with the solid quarterly results and positive adjusted EBITDA, but wouldn’t say when it will become profitable.
“We’re at the point where it’s a marginal loss but it is in part because the market really has not grown and we expect that to shift.”
Organigram said last November that its net revenue in the quarter would be higher than the $16.3 million in the fourth quarter due to increased sales to provinces and higher wholesale revenue.
The company said the Canadian cannabis market is poised for growth with more retail store openings planned in Ontario and Quebec, two provinces that together account for more than 60 per cent of the country’s population.
In particular, Ontario is moving to open more retail stores with approvals to be issued in April at an initial rate of about 20 per month.
Quebec also plans to double the number of stores and Alberta’s network of 375 stores will continue to grow to meet consumer demand.
Legalization of edible and derivative products is also expected to significantly expand the legal market although Newfoundland & Labrador, Quebec and Alberta have announced delays or restrictions on the launch of vaporizable products.
That increased demand should allow the company to move fairly quickly to “reinvigorate” its expansion plans, Engel added.
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Business
Oil Firms Doubtful Trans Mountain Pipeline Will Start Full Service by May 1st
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Oil companies planning to ship crude on the expanded Trans Mountain pipeline in Canada are concerned that the project may not begin full service on May 1 but they would be nevertheless obligated to pay tolls from that date.
In a letter to the Canada Energy Regulator (CER), Suncor Energy and other shippers including BP and Marathon Petroleum have expressed doubts that Trans Mountain will start full service on May 1, as previously communicated, Reuters reports.
Trans Mountain Corporation, the government-owned entity that completed the pipeline construction, told Reuters in an email that line fill on the expanded pipeline would be completed in early May.
After a series of delays, cost overruns, and legal challenges, the expanded Trans Mountain oil pipeline will open for business on May 1, the company said early this month.
“The Commencement Date for commercial operation of the expanded system will be May 1, 2024. Trans Mountain anticipates providing service for all contracted volumes in the month of May,” Trans Mountain Corporation said in early April.
The expanded pipeline will triple the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.
The Federal Government of Canada bought the Trans Mountain Pipeline Expansion (TMX) from Kinder Morgan back in 2018, together with related pipeline and terminal assets. That cost the federal government $3.3 billion (C$4.5 billion) at the time. Since then, the costs for the expansion of the pipeline have quadrupled to nearly $23 billion (C$30.9 billion).
The expansion project has faced continuous delays over the years. In one of the latest roadblocks in December, the Canadian regulator denied a variance request from the project developer to move a small section of the pipeline due to challenging drilling conditions.
The company asked the regulator to reconsider its decision, and received on January 12 a conditional approval, avoiding what could have been another two-year delay to start-up.
Business
Tesla profits cut in half as demand falls
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Tesla profits slump by more than a half
Tesla has announced its profits fell sharply in the first three months of the year to $1.13bn (£910m), compared with $2.51bn in 2023.
It caps a difficult period for the electric vehicle (EV) maker, which – faced with falling sales – has announced thousands of job cuts.
Boss Elon Musk remains bullish about its prospects, telling investors the launch of new models would be brought forward.
Its share price has risen but analysts say it continues to face significant challenges, including from lower-cost rivals.
The company has suffered from falling demand and competition from cheaper Chinese imports which has led its stock price to collapse by 43% over 2024.
Figures for the first quarter of 2024 revealed revenues of $21.3bn, down on analysts’ predictions of just over $22bn.
But the decision by Tesla to bring forward the launch of new models from the second half of 2025 boosted its shares by nearly 12.5% in after-hours trading.
It did not reveal pricing details for the new vehicles.
However Mr Musk made clear he also grander ambitions, touting Tesla’s AI credentials and plans for self-driving vehicles – even going as far as to say considering it to be just a car company was the “wrong framework.”
“If somebody doesn’t believe Tesla is going to solve autonomy I think they should not be an investor,” he said.
Such sentiments have been questioned by analysts though, with Deutsche Bank saying driverless cars face “technological, regulatory and operational challenges.”
Some investors have called for the company to instead focus on releasing a lower price, mass-market EV.
However, Tesla has already been on a charm offensive, trying to win over new customers by dropping its prices in a series of markets in the face of falling sales.
It also said its situation was not unique.
“Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs,” it said.
Despite plans to bring forward new models originally planned for next year the firm is cutting its workforce.
Tesla said it would lose 3,332 jobs in California and 2,688 positions in Texas, starting mid-June.
The cuts in Texas represent 12% of Tesla’s total workforce of almost 23,000 in the area where its gigafactory and headquarters are located.
However, Mr Musk sought to downplay the move.
“Tesla has now created over 30,000 manufacturing jobs in California!” he said in a post on his social media platform X, formerly Twitter, on Tuesday.
Another 285 jobs will be lost in New York.
Tesla’s total workforce stood at more than 140,000 late last year, up from around 100,000 at the end of 2021, according to the company’s filings with US regulators.
Musk’s salary
The car firm is also facing other issues, with a struggle over Mr Musk’s compensation still raging on.
On Wednesday, Tesla asked shareholders to vote for a proposal to accept Mr Musk’s compensation package – once valued at $56bn – which had been rejected by a Delaware judge.
The judge found Tesla’s directors had breached their fiduciary duty to the firm by awarding Mr Musk the pay-out.
Due to the fall in Tesla’s stock value, the compensation package is now estimated to be around $10bn less – but still greater than the GDP of many countries.
In addition, Tesla wants its shareholders to agree to the firm being moved from Delaware to Texas – which Mr Musk called for after the judge rejected his payday.
Business
Stock market today: Nasdaq futures pop, Tesla surges after earnings with more heavyweights on deck
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Tech stocks rose on Wednesday, outstripping the broader market as investors welcomed Tesla’s (TSLA) cheaper car pledge and waited for the next rush of corporate earnings.
The Nasdaq Composite (^IXIC) rose roughly 0.6%, coming off a sharp closing gain. The S&P 500 (^GSPC) was up 0.2%, continuing a rebound from its longest losing streak of 2024, while the Dow Jones Industrial Average (^DJI) fell 0.1%.
Tesla shares jumped nearly 12% after the EV maker’s vow to speed up the launch of more affordable models eclipsed its quarterly earnings and revenue miss. That cheered up investors worried about growth amid a strategy shift to robotaxis and the planned cancellation of a cheaper model.
The results from the first “Magnificent Seven” to report have intensified the already high hopes for Big Tech earnings, that the megacaps can revive the rally in stocks they powered. The spotlight is now on Meta’s (META) report due after the market close, as the Facebook owner’s shares rose after the Senate voted for a potential ban on rival TikTok. Microsoft (MSFT) and Alphabet (GOOG) next up on Thursday.
Meanwhile, Boeing (BA) reported better than expected first quarter results before the opening bell with a loss per share of $1.13, narrower than the $1.72 estimated by Wall Street. Shares rose about 2% in morning trade.
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