Tilray Inc. said it is on track to save at least US$80 million from its merger with Aphria Inc. as it reported a first-quarter loss of US$34.6 million and a revenue increase of 43 per cent compared with a year ago.<\/p>\n
Chief executive Irwin Simon said Thursday its earnings would have been better if the company had already applied some of Aphria's processes.<\/p>\n
"Our cannabis adjusted EBITDA would have been several million dollars higher, if legacy Tilray products had been produced under a more efficient Aphria cost model," Simon told a conference call with financial analysts.<\/p>\n
Simon has been in search of synergies between his Leamington, Ont. cannabis company and Aphria since their merger closed in May and he took the helm of the joint business.<\/p>\n
The companies originally estimated the deal would unlock US$100 million in savings and said US$50 million had been realized as of Sept. 30, putting Tilray ahead of its expected pace.<\/p>\n
That US$50 million came in part from the closures of facilities in Enniskillen, Ont. and Nanaimo, B.C.<\/p>\n
However, finding synergies has proved challenging in a COVID-19 environment, where many cannabis stores were forced to close for prolonged periods of time and others had to operate with reduced capacity for months.<\/p>\n
"The Delta variant quelled consumer confidence and impacted revenue in key consumer facing markets," Tilray chief financial officer Carl Merton told analysts.<\/p>\n
"The COVID Delta variant unquestionably impacted results."<\/p>\n
Provincial cannabis boards, he said, changed buying patterns when the more virulent variant emerged, but their purchasing rose again when vaccination efforts increased and pot shops reopened.<\/p>\n
Flooding in Germany shut down the company's operations for four days and resulted in almost US$5 million in lost revenues — slightly higher than the company's US$2.5 million to $4 million estimate.<\/p>\n
The company, which keeps its books in U.S. dollars, said the net loss amounted to eight cents per share for the quarter ended Aug. 31, compared with a loss of US$21.7 million or nine cents per share a year earlier, when it had fewer shares outstanding.<\/p>\n
Net revenue for what was the first quarter of the company's financial year totalled US$168.0 million, up from US$117.5 million a year ago.<\/p>\n
This report by The Canadian Press was first published Oct. 7, 2021.<\/p>\n
Companies in this story: (TSX:TLRY)<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
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