Cost savings enabled Althea to narrow losses in the first half of FY25 as the company told shareholders it was getting closer to profitability despite plunging sales of medicinal cannabis.
Well-documented struggles in its pharmaceutical division culminated in half-year revenue of only A$2 million, down from $10m in the previous corresponding period (PCP).
Althea announced last month it was reshaping its pharma division after blaming “market challenges” and supply-chain disruptions for the decline in sales.
Overall revenue in the six months to December fell almost 19% to $10.6m, a figure propped up by recreational division sales of $8.2m, a rise of 58%.
The company posted a net loss of $1.5m, an improvement on the adjusted $9m deficit in the PCP.
Along with the improved performance of its recreational division – now the driver of the Althea business – cost cutting and an exit from the UK helped narrow losses.
Expenses during the six-month period reduced from $21.5m to $6.7m, although H1 FY24 included a non-cash impairment charge of $7.6m.
Despite the poor performance of its medicinal cannabis operation, managing director Josh Fegan claimed a lower cost base and operational model “that continues to improve” placed Althea in a “far stronger financial position”.
“While we are not yet profitable, this half-year result demonstrates how close we are to achieving that milestone,” he said. “The impressive growth at Peak Processing Solutions is a major highlight, reinforcing the strength of our recreational cannabis strategy and the momentum in our THC beverage business.”
Net cash used in operating activities during the period exceeded $3m, with auditors again concluding that a material uncertainty exists over Althea’s ability to remain a going concern.
