Aphria Inc. (
) swung to a loss in its latest quarter in spite of exponential top line growth.
The Leamington, Ont.-based cannabis producer's net revenue surged 617 per cent year-over-year to $73.6 million in its fiscal third quarter.
Meanwhile, it reported a net loss of $108.2 million in the quarter, compared to a profit of $12.9 million in the fiscal third quarter of 2018. Its bottom line was dragged down by a $50-million non-cash impairment on its Latin American assets. Excluding charges, Aphria's adjusted quarterly loss was $0.20 per share.
Analysts, on average, expected Aphria to report a loss of $0.05 per share on $83.5 million in revenue.
Shares of Aphria were down 12 per cent in pre-market trading on the New York Stock Exchange as of 8:03 a.m. ET Monday morning.
Unsurprisingly, $APHA is already starting to write down its LatAm assets that we had flagged as overvalued. We expect more to come in subsequent quarters
cc @QCMFunds pic.twitter.com/nKcDtSgkMU
— Hindenburg Research (@HindenburgRes) April 15, 2019
The company sold 2,637 kilograms of cannabis in the three-month period ending Feb. 28, compared to 3,409 kilograms in the previous quarter. Aphria blamed the decline on “temporary packaging and distribution challenges,” as well as supply shortages due to new growing techniques.
“We continue to take decisive actions to increase efficiency, including investing additional capital in automation and packaging and adapting production to a new growing method,” said Aphria chairman and interim chief executive Irwin Simon in a release. “While this contributed to an increase in our costs, we expect higher future yields per square foot leading to stronger results as we start fiscal year 2020.”
Aphria also announced it will appoint former Whole Foods Market Inc. Co-CEO Walter Robb and David Hopkinson, global head of partnerships for the Real Madrid football club, to its board of directors.
In a separate release, Aphria disclosed Green Growth Brands Inc. has agreed to move up the expiration date of its hostile takeover offer for Aphria to April 25 from May 9.
"We are bringing our offer to an end on good terms with Aphria and are excited to turn our focus to our CBD personal care and retail cannabis businesses,” said Green Growth CEO Peter Horvath in a release. “We are actively continuing to review other partnerships and M&A opportunities to accelerate the build out of our company."