Tilray announces startling cost-cutting benefits, and Reuters pledges savings

(Reuters) – Canadian cannabis producer Tilray (NASDAQ 🙂 Inc. on Monday announced a staggering quarterly gain from Aphria’s reverse merger savings (NASDAQ 🙂 and pledged to cut costs by raising its shares by more than 12%. pre-market trade.

Tilray also pledged to cut $ 20 million more than the $ 80 million initially planned for the merger. Tilray and Aphria merged in May 2021, making it the largest cannabis producer in the world in terms of sales.

Tilray’s earnings, the first in a quarter ended in November at the hands of a large cannabis producer, could reassure investors who are frustrated by slow regulatory advances and a lack of profitability after spending years by Canadian pot sellers.

Tilray’s shares rose nearly 13% before trading at $ 7.22. Shares of other major Canadian cannabis producers, among others Cannon Breeding (NASDAQ 🙂 Corp., Hexo Corp. and Cronos Group (NASDAQ 🙂 Inc. gained 2% to 6% after the Tilray report.

On an adjusted basis, Tilray posted gains of 3 cents per share in the second quarter ended Nov. 30, while analysts expected a loss of 9 cents per share, according to estimates by Refinitiv IBES.

The company’s revenue rose 20% to $ 155 million, but analysts fell below the average estimate of $ 170.55 million. CEO Irwin Simon blamed the market for saturation and related competitive challenges in Canada.

Simon said Tilray is responding to these challenges by adjusting the prices of his products, a strategy that he hopes will help his company gain lost market share.

The company had a net profit of $ 6 million compared to a loss of $ 89 million a year earlier.

(This story corrects paragraph 2 to say that Tilray and Aphria were combined in May 2021, not June 2020.)