Aphria Inc.'s medical cannabis business and German operations pushed the company to report a $5.1-million loss in its latest quarter, compared with a $16.4-million profit in the same period a year ago.<\/p>\n
The Leamington, Ont.-based cannabis company said Thursday that the loss amounted to two cents per share for the quarter ended Aug. 3, compared with a profit of seven cents per share a year ago.<\/p>\n
Revenue in what was the company's first quarter of its financial year totalled $145.7 million, up from $126.1 million a year earlier.<\/p>\n
On average, analysts had expected a loss of four cents per share and nearly $159.7 million in revenue, according to financial data firm Refinitiv.<\/p>\n
Chief financial officer Carl Merton blamed the loss on challenges the cannabis industry has faced in the medical market since the COVID-19 pandemic reached Canada and encouraged people to increasingly stay home and put off visits to health care professionals.<\/p>\n
"The portions of our business reliant on in-person visits, whether they be to doctor offices, hospitals, pharmacies or cannabis clinics, continue to be negatively impacted," Merton told analysts on a call.<\/p>\n
"The volume of these visits were noticeably down during the quarter."<\/p>\n
To offset the medical cannabis troubles, the company focused heavily on two new brands it introduced.<\/p>\n
B!ngo is meant to offer products at cheaper price points and with potencies so low the company compares them to "a nice cold beer on a summer’s day."<\/p>\n
Aphria said B!ngo provided 6,340.4 kilograms and more than $18,700 in additional sales during the quarter.<\/p>\n
It also launched P’tite Pof, a Quebec-inspired brand that uses flourishes borrowed from convenience stores and fast-food outlets.<\/p>\n
Chief executive Irwin Simon said both generated strong initial demand and he believes they will complement Aphria's other brands including Solei, Broken Coast Cannabis, RIFF and Good Supply.<\/p>\n
He also revealed that Aphria sold 20,882 kilograms or kilogram equivalents of cannabis in the quarter, up from 12,557 a year ago<\/p>\n
The company's cannabis revenue grew to $62.5 million compared with $53.1 million a year ago, while distribution revenue fell to $82.2 million compared with $99.1 million in the same period last year.<\/p>\n
The results pushed Aphria's stock down by 12.71 per cent to reach $6.73 in morning trading.<\/p>\n
Executives said that some of their decreases came from the German market, which proved to be difficult this quarter because Europeans are travelling less and elective surgeries are down.<\/p>\n
"It's slow, but it's coming and it's not like it's coming to a halt," said Simon. "Unfortunately, COVID has not helped at all."<\/p>\n
Simon predicted Germany will be the first country in the EU that will legalize recreational cannabis, but for now, he cautioned that troubles remain.<\/p>\n
This isn’t the first period of trouble Aphria has stumbled upon in 2020 in relation to overseas operations.<\/p>\n
The company reported a $98.8 million net loss and non-cash asset impairment expenses worth $64 million in its fourth quarter of its last fiscal year.<\/p>\n
The impairment expenses stemmed from operations in Colombia, Jamaica and Lesotho, where Aphria was hit hard by COVID-19 border closures.<\/p>\n
This report by The Canadian Press was first published Oct. 15, 2020.<\/p>\n
Companies in this story: (TSX:APHA)<\/p>\n
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