Aphria posts $98.8 million net loss in Q4, missing analyst estimates

Aphria posts $98.8 million net loss in Q4, missing analyst estimates

Canadians may have clamoured to snatch up cannabis products as COVID-19 ravaged the country, but the demand was not enough to keep Aphria Inc. from incurring a multimillion-dollar loss and impairment charge.

The Leamington, Ont.-based company revealed Wednesday that in its fourth quarter, which ended May 31, it experienced a $98.8 million net loss and a $64 million non-cash asset impairment expense.

The impairment expenses were linked to international markets. About $40 million of the charge is connected to operations in Colombia, $19 million to Jamaica and $5 million to Lesotho.

Tourism, which Jamaica thrives on, was deeply impacted by COVID-19, forcing Aphria to reevaluate its relationships and cash-flow expectations, chief executive Irwin Simon told The Canadian Press.

“There’s no one going to Jamaica right now, so there’s no business and with that we just shut down those stores and said, ‘why would we invest in those stores?” he said.

Over in Lesthoto, where borders were closed, Aphria’s partners and senior management team have not been able to access facilities because they reside outside the country.

“It was a small market that was really supposed to come along with some other acquisitions, but we just decided to close that down,” Simon said.

The international struggles came as Aphria reported a loss that amounted to 39 cents per share for the quarter, compared with a year-earlier profit of $15.8 million or five cents per share.

Analysts had estimated a net loss of four cents per share, according to financial markets data firm Refinitiv.

The results caused Aphria’s stock to slide by more than 16 per cent or $1.31 in midday trading to reach $6.71.

Aphria’s net revenue, however, increased 18 per cent to $152.2 million from $128.6 million, as Canadians stocked up on cannabis while their companies forced them to work from home and to physically distance as much as possible.

“I think there was a little bit of pantry-loading, but we are seeing a good repeat in sales right now,” said Irwin.

Those repeat sales pushed Aphria’s recreational cannabis market share in Ontario to 16.1 per cent from 13 per cent in the prior quarter and snatch up 12 per cent of market share in Alberta.

Looking forward, Simon said the company would be looking at how to supply Latin American demand.

It will use products from Canada for now, but that could change, he said.

“We are exploring our mid- to long-term options of whether a smaller production footprint would be appropriate or whether to outsource production to a third-party or simply to ship product from Canada,” he said on the company’s earnings call.

The company is also looking at adding to its brands, which currently include Solei, Broken Coast Cannabis, RIFF and Good Supply.

Irwin said consumers can expect two new brands in fiscal 2021, but offered no details about how they will be positioned.

For the full year, Aphria’s net loss attributable to shareholders surged to $92 million or 33 cents per share, from $14.7 million or seven cents in 2019. Revenues increased 130 per cent to $543.3 million from $237.1 million.

This report by The Canadian Press was first published July 29, 2020

Companies in this story: (TSX:APHA)

Tara Deschamps, The Canadian Press

Aphria

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta children whose only symptom of COVID-19 is a runny nose or a sore throat will no longer require mandatory isolation, starting Monday.
477 new COVID-19 cases confirmed in Alberta on Thursday

Changes being made to the COVID-19 symptom list for school-age children

Alisha Bryan holds a handful of poppy sticks at the poppy laying ceremony on Oct. 28. (Alannah Page/Lacombe Express)
Remembrance Day will look a little different this year for Lacombe

The Lacombe Legion is taking COVID-19 precautions for people who want to pay their respects.

Chad Carlson (left) Jarita Carlson and their two children Milo Carlson (left) and Lennon Carlson are dressing up as Ghostbusters for Halloween. (Alannah Page/Lacombe Express)
Lacombe family passionate about Halloween and giving back to their community

COVID-19 has changed how the Carlson’s will celebrate Halloween this year

The Lacombe Legion volunteers laid poppies beside the graves of veterans on Oct. 28. (Alannah Page/Lacombe Express)
Lacombe Legion volunteers lay poppies for fallen veterans

Twenty volunteers showed up on Wednesday to pay their respects and help out

There were 410 COVID-19 cases recorded in Alberta Wednesday. (File photo by The Associated Press)
Alberta records 410 new COVID-19 cases Wednesday

Central zone dropped to 160 active cases

Royal Alexandra Hospital front-line workers walk a picket line after walking off the job in a wildcat strike in Edmonton, on Monday, October 26, 2020. THE CANADIAN PRESS/Jason Franson
Alberta labour board orders health-care staff who walked off the job to go back to work

Finance Minister Travis Toews said in a news release that he was pleased with the labour board’s decision

Pilots Ilona Carter and Jim Gray of iRecover Treatment Centres, in front of his company’s aircraft, based at Ponoka’s airport. (Perry Wilson/Submitted)
95-year-old Ilona Carter flies again

Takes to the skies over Ponoka

Children’s backpacks and shoes are seen at a daycare in Langley, B.C., on Tuesday May 29, 2018. Alberta Children’s Services Minister Rebecca Schulz says the province plans to bring in a new way of licensing and monitoring child-care facilities. THE CANADIAN PRESS/Darryl Dyck
Alberta proposes legislation to change rules on child-care spaces

Record-keeping, traditionally done on paper, would be allowed digitally

Prime Minister Justin Trudeau shakes hands with US Vice-President Joe Biden on Parliament Hill in Ottawa on Friday, December 9, 2016. THE CANADIAN PRESS/ Patrick Doyle
A Biden presidency could mean good news for Canadian environment policy: observers

Experts and observers say even a U.S. outside the Paris agreement may ultimately end up in the same place

People take a photo together during the opening night of Christmas Lights Across Canada, in Ottawa, on Wednesday, Dec. 4, 2019. The likelihood that most Canadians will enjoy a holly jolly Christmas season of gatherings, caroling and travel is unlikely, say public health experts who encourage those who revel in holiday traditions to accept more sacrifices ahead. THE CANADIAN PRESS/Justin Tang
Ho, ho, no: Experts advise preparing for a scaled-back COVID holiday season

Many of the holiday season’s highlights have already been scrapped or are unlikely to take place

Sen. Kim Pate is shown in Toronto in an October 15, 2013, file photo. The parliamentary budget office says a proposed law that would give judges discretion on whether to apply a lesser sentence for murder could save the federal government $8.3 million per year. THE CANADIAN PRESS/Colin Perkel
Judicial discretion for mandatory minimum sentences for murder would save $8.3M: PBO

The result would be fewer people in long-term custody at federal correctional institutions, experts say

Husky Energy logo is shown at the company’s annual meeting in Calgary on May 5, 2017. THE CANADIAN PRESS/Jeff McIntosh
Husky pipeline spills 900,000 litres of produced water in northwestern Alberta

The energy regulator says environmental contractors are at the site

A raccoon paid a visit to a Toronto Tim Hortons on Oct. 22, 2020. (shecallsmedrew/Twitter)
Who are you calling a trash panda? Raccoon takes a shift at Toronto Tim Hortons

Tim Hortons said animal control was called as soon they saw the surprise visitor

Most Read