Canada’s Aphria reports loss, cuts revenue guidance for 2020

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.