Avant Brands net income surges 400% in first quarter

Canadian producer Avant Brands Inc. (TSX: AVNT) (OTCQX: AVTBF) announced record-breaking financial results for the first quarter of 2024 ending Feb. 29, thanks to a successful international expansion strategy and a tight ship across the board.

The company reported a 15% rise in net revenue, reaching $8.1 million, with international sales surging by 21% to $3.3 million. Avant achieved a record adjusted EBITDA of $3.8 million, a significant 120% increase.

The growth was primarily driven by Avant’s aggressive market penetration in key regions such as Australia, Germany and Israel.

The company also reported a record adjusted net income of $1.2 million, a 403% increase attributed to increased sales and efficient cost management.

“Despite facing short-term challenges in late 2023, Avant Brands is pleased to report record-breaking Q1 2024 results across all key metrics,” founder and CEO Norton Singhavon said in a statement.

“This achievement signifies a successful return to our growth trajectory. Our team’s unwavering commitment to production increases, sales growth and cost reduction has played a pivotal role in driving this turnaround. We are confident that by staying relentless in adhering to these core principles, we will achieve continued growth as we execute our global expansion strategy.”

Avant’s focus on production optimization led to a record cannabis output of 3,231 kilograms, resulting in lower production costs and higher gross margins. The company also reported a record 2,785 kilograms of cannabis sold during the quarter.

Cash flow from operations increased to $3.8 million, marking seven consecutive quarters of positive cash flow. Effective cost-control measures resulted in a 14% reduction in SG&A and corporate expenses, further improving profitability.

“Notably, the Company maintains a flawless track record, achieving 100% collection on all international sales and brand licensing revenue,” it said in a news release.

Subsequent to the first quarter, Avant said it expanded its cultivar offerings to meet rising global demand. The company also partnered with IM Cannabis Corp. (NASDAQ: IMCC) to launch its flagship brand, BLK MKT, in Germany. The idea is to position it as a big player in what is anticipated to be the largest recreational cannabis market globally, as Canadian cannabis market opportunities dry up.

While questions around Germany country’s recent quasi-legalization temper excitement, its medical program is going to benefit greatly from the new measures.

Looking forward, Avant said it plans to prioritize market expansion and build BLK MKT into a “global icon.”

The company also said it is in “active discussions” to launch the flagship brand in Australia.