Debra Borchardt
Ontario-based Aphria Inc. (APHQF) reported that its revenues for the third quarter ending February 28 were C$10.2 million versus last year’ C$5.1 million for the same time period, an increase of 100%. Revenue increased 20% sequentially from C$8.5 million. Gross profits for the quarter were C$8.5 million over last year’s C$3.5 million.
The net income for the quarter was C$12.9 million, a nice increase over last year’s C$4.9 million. The increase in net income relates to the strength of Aphria’s investment portfolio, including its realized gain on sale of its non-escrowed shares in Liberty Health Sciences, Ltd. in the quarter.
“We had another incredible quarter, with year-over-year revenue having more than doubled, cash costs back under $1, and our 10th consecutive quarter of positive adjusted EBITDA,” said Vic Neufeld, CEO of Aphria. “After the end of the quarter, we brought additional production capacity online with our Part III expansion at Aphria One and established a worldwide presence through our acquisition of Nuuvera. We continue to hold a strong cash position that will give us the flexibility to pursue attractive investment opportunities both domestically and around the world.”
The increase in revenue was attributed to continued growth in wholesale shipments and sales to existing patients. In addition to that, the company enjoyed sales from Broken Coast during February and continued acceleration of new patients and an increased average selling price of the product.
Product Sales
The company sold 1,428.1 kilograms of cannabis for the quarter versus 1,237.0 for the previous year in the same time period. The cash cost to produce the dried cannabis fell from last year’s C$1.45 per gram to C$0.96 per gram. The “all-in” cost of sales of dried cannabis also fell from C$2.13 to C$1.56.
Earnings
In the company’s statement, Aphria’s adjusted EBITDA for the quarter was C$2,940 compared to C$871 in the same quarter in the prior year, an increase of over 237%. It was the tenth consecutive quarter, the company reported positive adjusted EBITDA.
Looking Ahead
Aphria said that its focus will shift to inventory build for the adult-use pipeline in Canada, to ensure ample product availability on the first day of adult-use, and international opportunities to allocate supply to higher margin medical opportunities. The Aphria One – 700,000 square foot Part IV expansion project remains on-time, the first sale continues to be expected in January 2019. Aphria Diamond – 1,300,000 square foot retrofit project remains on-time, the first sale continues to be expected in January 2019. Broken Coast – Phase III expansion is complete and awaiting Health Canada. Phase IV expansion project modified to increase capacity but moves first sale expectations to Fall 2019.
