MTL Cannabis Reports Record 2024 Financial Results with $83.1M Revenue
MTL Cannabis Reports Record $83,1M Revenue for 2024, Marking a 165,7% Increase.
- MTL Cannabis reported a revenue of $83.1M for the full year 2024, a 165.7% increase from the previous year, making the company about 25% of the size of Aurora Cannabis.
- The company has positive net income and achieved a $13.2M Adjusted EBITDA, a 122.2% rise from the prior year.
- The company has a higher one-year cash flow and adjusted EBITDA than its market cap!
MTL Cannabis Corp.(CSE:MTLC) has announced its Q4 and full-year 2024 financial results with revenue of $83.1M, up 165.7% from the previous year. Those are very large revenue numbers for a company that most people might not be familiar with. As a comparison, the company’s revenue would be about 25% of that of its Canadian competitor, Aurora Cannabis, which is widely known.
Before we continue with their earnings, let’s take a detour to share some company background. The company is based in Montreal, Canada, and is focused on sustainable and advanced cultivation practices. It is also still focused on Canada’s medical market, which allows insurance reimbursement of medical cannabis. The company’s history is also linked to Canada House Cannabis, which it merged with last year. The company also has an international expansion plan with established exports already to established in Germany, Australia, Poland, Portugal, and the United Kingdom.
The company’s gross margin significantly improved from cost-cutting to reach 45.6%, an increase of 9.9% from the previous year. This gross margin level aligns it with other smaller US MSOs. Operating income surged by 486.7% to $4.6M, a dramatic turnaround from a loss of $1.2M in the prior year. Net and comprehensive income were $2.4M, marking a substantial recovery from a loss of $2.2M the previous year. The company is one of the cannabis companies that are fully profitable after all taxes and costs are paid.
The company’s adjusted EBITDA reached $13.2M, up 122.2% from the prior year. This growth reflects enhanced operational efficiencies and the company’s ability to scale its business effectively. The company also reported positive cash flows from operations, with net cash inflows of $13.8M, a significant improvement compared to a net outflow of $0.7M the previous year.
This is where the story takes a twist. Although the current market capitalization is only $9.14M, the one-year cash flow and adjusted EBITDA are higher than its market capitalization! It is rare to find a company trading at its one-year cash flow! Like many Cannabis companies, the chart below shows how the stock has been affected over time.
What is management doing with this positive cash flow? Management is reinvesting the cash flow into the business to produce future earnings. Investment activities saw a net cash outflow of $2.2M, primarily reflecting the capital expenditure on facility upgrades and expansion projects. Key business reinvestments included the completion of retrofits at MTL’s facilities in Montréal, Louiseville, and Pickering. These upgrades have expanded the company’s consolidated cultivation capacity by 6,500 kg annually, bringing the total estimated cultivation capacity to 19,500 kg annually.
Consumers are also becoming big fans; the MTL cannabis brand received significant recognition within the Canadian recreational cannabis market, winning Brand of the Year at the 2024 Grow Up Conference. Additionally, Canadian budtenders named it the #1 recommended brand in a survey conducted by the Brightfield Group and O2O.
This earnings report shows a company that is not well known yet has been quietly producing tremendous results. At these valuations, a deeper analysis is warranted.
