Aphria reports CA$108 million loss on lower marijuana sales

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(A previous version of this story incorrectly listed Aphria’s forecasted revenue for 2019.)

Despite a sharp increase in revenue, Ontario-based Aphria’s third-quarter 2018 profit of 12.9 million Canadian dollars ($9.6 million) turned into a net loss of CA$108.2 million for the third quarter of fiscal 2019.

The company reported revenue of CA$73.6 million for the third quarter ended Feb. 28 compared with CA$10.3 million for the prior-year period.

Aphria said it ended the quarter with slightly more than $100 million in cash.

Cannabis revenue accounted for just 24% of Aphria’s net revenue, and kilogram equivalents sold totaled 2,637, down from 3,409 the prior quarter.

Revenue increased 240% from the previous quarter, primarily distribution revenue attributed to assets in Europe and Latin America, specifically CC Pharma in Germany.

The company recently was selected to be one of the three domestic cultivators in Germany.

CC Pharma is an importer and distributor of pharmaceuticals and cannabis, but Aphria’s facilities still lack EU-GMP certification, so the sales are derived from other suppliers.

The same applies to Aphria’s importer in Italy, FL Group, which imports only cannabis produced by Bedrocan in the Netherlands.

According to Aphria’s management discussion and analysis filing, distribution gross margin is well below that of cannabis – 13.6% and 36.3%, respectively – which contributed to the company’s significant net loss for the period.

The company is forecasting revenue of CA$500 million in 2019 and CA$1 billion in 2020, though management did not disclose during a conference call with analysts how much of that would come from direct sales of cannabis.

Aphria’s bottom line was also negatively impacted by a $50 million noncash impairment charge related to its acquisition of LATAM Holdings.

Aphria trades under the ticker symbol APHA on the Toronto Stock Exchange and the New York Stock Exchange.