OrganiGram reports outstanding Q1 2019 results
OrganiGram reported an outstanding first quarter of 2019 that reflects some of the impact of legalized recreational cannabis sales. Net sales for the quarter were CA$12.4 million, up from CA$2.4 million in the same quarter last year and up from CA$3.2 million in Q4 2018. This represents a 419% and 287% jump, respectively. Net income grew to CA$29.5 million or $0.195 per diluted share. This was a sharp improvement over a net loss of CA$1.2 million or $0.012 per diluted share last year.
The first quarter of 2019 covered the three-month period ended November 30, 2018 included one month of legalized cannabis sales. Management estimates that second quarter results that will include a full three months of legalized sales will be at least double the net revenue from the first quarter. OGI should show consistent growth over the next several quarters for the same reason.
I have liked OGI for the past three years as a company focussed on producing a solid bottom line and they have had problems along the way. The major issue was the pesticide issue but I remained convinced that they are worth sticking with and I continue to feel that way. In more recent months, I have considered OGI as a takeover target and I still do. These excellent financial results does not change that except to raise the price.