The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (US: TGODF) reported its financial results for the fourth quarter and fiscal year ending December 31, 2019. TGOD’s quarterly revenue was $3.25 million and $11.16 million for the year. This revenue consisted of hemp-derived product sales in Europe of $2.56 million for the quarter and $9.88 million for the year. Sales from cannabis products in Canada were only $0.69 million for the quarter and $1.28 million for the year.
The company said that quarterly sales in Canada increased marginally due to limited production from the Ancaster facility. TGOD said it initiated production in its hybrid greenhouse in November 2019, with an eight-week flowering cycle.
Loss Remain Elevated
The company delivered a quarterly net loss of $144.75 million in the quarter and a net loss of $195.75 million for the year including non-cash impairment charges of $127.74 million for the quarter. The charges were related to certain cash-generating assets being built or used in Canada, and the company’s investment in Epican Medicinals. The company said in its statement, “These impairment charges are primarily due to market conditions, which have caused the company to revise its near-term and long-term growth forecasts in the reduced operating facility footprint, and the strategic decision to forgo the expansion of its proposed cultivation activities for export in Jamaica in order to focus on its Canadian operations.”
“While 2019 was a challenging year for the entire sector, we have made significant progress on the operational front and adjusted our construction and operating plan to preserve shareholder capital and in light of changing market conditions,” commented Brian Athaide, CEO of TGOD. “Despite taking impairment charges this quarter, as we continue to evaluate financing options, we note that the value of our assets still far exceeds our liabilities. With our first 2.0 product, TGOD Infusers, now available, our teas and vapes launching next month, as well as additional launches planned later this year, we anticipate continued sales momentum for the rest of 2020,” continued Athaide.
TGOD also said that it had streamlined its leadership structure. The company’s former President, Mr. Csaba Reider, and its former Vice-President of Sales, Mr. Mike Gibbons, departed the organization. Their responsibilities have been consolidated under existing roles.
Athaide continued saying, “As market conditions improve, and should the Company decide to bring additional cultivation zones online which would increase the expected recoverable amount of future cashflows, the non-cash impairment charges may be reconsidered and be reversed as permitted by its accounting framework.