Aphria reported a net loss of 8 million Canadian dollars ($6.2 million) for the second quarter ending Nov. 30, 2019, and the Canadian cannabis producer lowered its fiscal 2020 revenue outlook.
The company’s net revenue for the three-month period was CA$120.6 million, down from the previous quarter’s CA$126 million and lower than analyst expectations.
Net income also took a turn lower.
Aphria’s second-quarter CA$8 million in red ink is a substantial downturn from the first-quarter net income gain of CA$16.4 million.
The quarter’s adjusted EBITDA increased slightly to CA$1.9 million, about in line with expectations.
Canaccord Genuity analyst Matt Bottomley had expected Aphria to report net revenue of almost CA$130 million and adjusted EBITDA of CA$2.2 million.
Citing regulatory hurdles in Germany, Canadian provinces Alberta and Ontario and by Canada’s federal government, Aphria lowered its guidance on net revenue to CA$575 million-CA$625 million for fiscal year 2020.
That was a slight decrease from the previously disclosed expected net revenue of CA$650 million-CA$700 million.
The company also lowered its guidance for adjusted EBITDA to CA$35 million-C$42 million for the year, down from the previous CA$88 million-CA$95 million.
For the lower guidance the company cited:
- A slower-than-expected retail location rollout in Ontario.
- A temporary ban on vape products in Alberta.
- The amount of time it took Health Canada to fully license its Aphria Diamond facility.
- Slower CC Pharma growth as a result of recent changes in the German government’s medical reimbursement model.
Aphria also announced that interim CEO Irwin Simon is taking the reins on a permanent basis, effective Jan. 14.
Simon served as interim CEO since his predecessor stepped down in February 2019 after a period of significant volatility for the company.
The company said Jodi Butts has been elected to the board.
Aphria, which ended the second quarter with CA$498 million of cash and cash equivalents, trades as APHA on both the New York Stock Exchange and Toronto Stock Exchange.
