Hexo unveils expected savings from strategic plan, facility reconfiguration
GATINEAU, Que. - Hexo Corp. says it expects its new strategic plan to reduce selling, general and administrative expenses by about 30 per cent by the end of fiscal 2023.
The Gatineau, Que.-based cannabis company says its plan, which was unveiled last month after its debts mounted and founder left the businesses, will deliver about $175 million in cash over the next two fiscal years.
The company says the plan will generate incremental cash flow of about $37.5 million in fiscal 2022 and an additional $135 million next year.
Hexo plans to achieve these goals by moving away from co-packaging agreements and toward using its in-house production capabilities.
Hexo intends to reconfigure its network of facilities to uncover greater efficiencies and will move vape and distillate production to a site it recently acquired, when it purchased Redecan for $925 million.
The company says it has also sold its 25 per cent interest in the Belleville Complex Inc. to Olegna Holdings Inc. for about $10.1 million, but will continue to lease the facility.
This report by The Canadian Press was first published Jan. 19, 2022.
Companies in this story: (TSX:HEXO)
