Kaitlin Domangue
Leading cannabis giant, Aphria Inc. (TSX: APHA) (Nasdaq: APHA), reported their first quarter earnings ending on August 31st, 2020. Aphria is a fully-integrated company that is headquartered in Canada. The company was founded in 2013, and has since expanded to have operations throughout the world. Aphria and its subsidiaries can be found in the United States, South America, the Carribean, Europe, and Africa. Their brands include Broken Coast, Solei, Riff, and Good Supply. Aphria has clearly established a global footprint that allows them to provide cannabis to people all over the world. They believe strongly in “Plant Positivity”, which according to them, is their “platform for increasing awareness about the power that plants have to improve people’s everyday well-being.”
Aphria reported their first quarter earnings with a record revenue from adult-use cannabis, as well as some other amazing numbers. All figures reported are in Canadian dollars, unless otherwise indicated.
The company reported a gross revenue of $69.6 million in the first quarter for fiscal year 2021. This represents strong growth, showing a 23% increase from the prior quarter, as well as the sixth consecutive quarter of growth. Their net cannabis revenue totaled $62.5 million, showing a whopping increase of 103% from the same quarter last year. The company reported an adjusted EBITDA of $10.4 million for cannabis business, representing an 11% increase from the prior quarter. Aphria’s numbers seem to be on an upwards trend based on the data we see here.
The company’s adjusted gross profit for the first quarter was $31.5 million, compared to $28.1 million from the prior quarter. Their adjusted gross margin for the first quarter was 49.7%, showing a slight decrease from the prior quarter’s 52.9%. This can be primarily explained by the company’s recent release of large format products, as well as the pipeline fill for B!NGO, which is Aphria’s economy brand that utilizes lower potency cannabis.
Aphria’s total net revenue from the first quarter reached $145.7 million, an increase of 16% from last year’s quarter. The company did report a 4% decrease in total net revenue from the prior quarter, however, this is solely due to circumstances and lower distribution revenue stemming from COVID-19, specifically from CC Pharma in Germany. It is interesting to see that while their total net revenue decreased slightly from the prior quarter, their net cannabis revenue increased by 23%. This can possibly be attributed to the high demand for cannabis during these unforeseen times, as well as people beginning to return to more normal shopping routines. Their total adjusted EBITDA for the first quarter totals $10 million, increasing by 17% from the prior quarter.
Aphria reported a net loss of $5.1 million for the first fiscal quarter, showing a significant decrease from the prior quarter’s loss of $98.8 million.
Especially considering the COVID-19 curve balls that every company has had to navigate, Aphria ended the first quarter with a bang. They finished with a strong balance sheet and liquidity; which includes $400 million of cash and cash equivalents to fund the company’s growth, both in Canada and internationally.
“Our strong first quarter results reflect the continued robust growth and development of Aphria’s adult-use cannabis brands in Canada ,” said Irwin D. Simon, Chairman and Chief Executive Officer. “We are consistently taking a diversified approach to our innovation, strategic partnerships, global expansion and corporate citizenship to fuel sustainable, long-term growth. We believe that the strength of our balance sheet and cash position, combined with our consistent focus on our highest-return priorities, will generate sustainable long-term value for all stakeholders.”
In addition to their strong first quarter from a financial perspective, Aphria also made some other growth-inducing moves. They transferred their stock exchange listing from the New York Stock Exchange to NASDAQ on June 8th, 2020. This transition did not impact their primary listing on the Toronto Stock Exchange.
