News

Neptune investment in cannabis business causes losses

21 Feb 2018

Neptune has announced its third quarter results. Operating loss was $1.3 million compared to an Adjusted EBITDA of $1.3 million in the prior year reflecting investment in cannabis business development.

Neptune has announced its third quarter results. Revenues of CAN$7.3 million reflect a 7.5% increase in the Solutions Business and the sale of the krill oil business on August 7, 2017; revenues for Q3 2017 were $12.3 million. A gain of $8.8 million was realised from the deconsolidation of Acasti Pharma (non-control position). Net income was $6.0 million versus $11.2 million in the prior year in the nutraceutical segment. Operating loss was $1.3 million compared to an Adjusted EBITDA of $1.3 million in the prior year reflecting investment in cannabis business development.

"In our third quarter, we executed well against our strategic growth initiative to enter the cannabis business and further expanded our solutions business. Leveraging our proven expertise across multiple skillsets in science, regulation, formulation and commercialization, I am pleased to report that all the elements of our cannabis growth plan are solidly on track," said Jim Hamilton, President and Chief Executive Officer of Neptune.

"Since our business review meeting last November, we have been very busy with business development activities, including discussions with potential suppliers, site preparation, and progress toward securing licenses," addedHamilton. "In addition, we have conducted numerous solvent trials, intended to prove the effectiveness of this approach for cannabis oil extraction, which have yielded promising results. Concurrently, we recently entered into research and development partnerships that will facilitate the commercialization of clinically proven value-added products for the cannabis space, ones that will be differentiated by our extraction, purification and formulation expertise."

"Our Solutions Business revenue, supported by the growth of our MaxSimil delivery platform, increased 7.5% versus the prior year's quarter and 2.6% sequentially," said Hamilton. "Based on our current backlog of business, we expect a very strong fourth quarter in this business. As a result, we remain confident that we will achieve our stated goal of double-digit revenue growth in the segment for the full year."

"As we come to the end of a major transition year for Neptune, the foundational building blocks for our cannabis initiative have been put into place, upon which we will build the framework to take us to a new level of growth and profitability. We are fielding a strong experienced team, have identified all the necessary steps to complete the journey and are confident we can bring highly differentiated products to the market. We look forward to updating you on our progress over the ensuing quarters through news releases about our business developments and milestone achievements,” concluded Hamilton.