Aphria Announces Fourth Quarter Revenues

Published: August 1, 2018

Aphria Announces Fourth Quarter Revenues

Aphria Inc. reported its results, for the fourth quarter and year ended May 31, 2018. All amounts are expressed in Canadian dollars.

Three months ended May 31,

Twelve months ended May 31,





$ 12,026

$ 5,718


$ 36,917

$ 20,438

$ 18,591

$ 5,826

Gross profit

$ 40,877

$ 17,298

$ 9,468

$ 4,903

Adjusted gross profit 1

$ 27,912

$ 15,854



Adjusted gross margin 1



$ (4,992)

$ (2,593)

Net income (loss)

$ 29,448

$ 4,198

$ 2,227

$ 2,534

Adjusted EBITDA from ACMPR operations 1

$ 8,419

$ 5,517




Kilograms (or kilogram equivalents) sold 1


$ 12,026


$ 10,267

$ 2,227

Adjusted EBITDA from ACMPR operations 1

$ 2,940

$ 0.95

Cash cost to produce dried cannabis / gram 1

$ 0.96

$ 1.60

“All-in” cost of goods sold / gram1

$ 1.56

$ 104,799

Cash and cash equivalents & marketable securities

$ 173,683

$ 150,758

Working capital

$ 234,589

$ 39,042

Investment in capital and intangible assets – wholly-owned subs 1

$ 35,427

Key Operating Highlights

  • Eleventh consecutive quarter of positive Adjusted EBITDA from ACMPR operations1$2.2 million in adjusted EBITDA from ACMPR operations1 in the quarter and $8.4 million for the year, a 38% increase over the prior year.
  • Improved cash costs to produce dried cannabis per gram1 (“Cash costs“) to $0.95, a decrease of $0.01 in the quarter, remaining below $1.00 for the second consecutive quarter.
  • International operations and presence increased from Canada, US and Australia to also include GermanyMaltaLesothoItalyColombiaArgentinaUnited Kingdom and Uruguay. Subsequent to year-end, announced access to additional countries including Jamaica and Brazil in the fall.
  • Annual production capacity in Canada currently at 30,000 kgs at Aphria One and 5,000 kgs at Broken Coast.
  • Annual production capacity in Canada growing to 255,000 kgs, with first sale expected in January 2019, all expansions remain on time, pending Health Canada approval, and on budget.
  • Secured partnership with one of North America’s largest liquor distributors, Southern Glazer’s through their Canadian subsidiary, Great North Distributors, providing Aphria with an exclusive for cannabis representation2
  • Signed MOU’s with British ColumbiaAlbertaManitobaQuebecNew Brunswick and the Yukon Territory, with more agreements to be announced in the short-term.
  • Added significantly to our senior leadership team with the hire of our Chief Commercial Officer and Chief Legal Officer.
  • Continued leadership in cannabis product innovation with announcement of a major investment in our Extraction Centre of Excellence.

“We had a healthy fourth quarter and a solid year with many achievements we are proud of,” said Vic Neufeld, Chief Executive Officer, Aphria. “We are excited and ready to hit the ground running on the first day of legal adult-use. It won’t be without its challenges but we have a plan and the team in place to get it done. We continue to sign supply agreements with provinces and territories, and our Southern Glazer’s sales network partnership is unmatched, ensuring our brands and products are available and represented by retailers across the country.”

“Beyond that, we will continue to extend our industry-leading expertise and experience into global markets. We’ve had an exciting year adding more depth and experience to our senior leadership team that has helped expand our international operations and presence outside of Canada, US and Australia to an additional eight countries, and look forward to continued expansion within LATAM,” continued Neufeld.

“Our continued growth and success is a direct result of the hard work and dedication of our employees and partners in delivering quality product and value to our patients, and establishing Aphria as the premier cannabis company in Canada and around the world,” concluded Neufeld.

Key Financial Highlights

For an industry leading eleventh consecutive quarter, the Company reported positive adjusted EBITDA from ACMPR operations1. In the quarter, the Company reported $2.2 million in adjusted EBITDA from ACMPR operations1 and $8.4 million for the year, an increase of 53%. During the quarter, the Company refined its definition of adjusted EBITDA to include an EBITDA definition from both ACMPR operations and non-ACMPR operations. The Company defines ACMPR operations as activities, revenue, expenses and adjusted EBITDA from its Aphria One, Aphria Diamond and Broken Coast facilities. The remaining adjusted EBITDA relates to activities at Aphria International. For the quarter ended, the Company incurred an adjusted EBITDA loss of $2.8 million at Aphria International.

The Company remains committed to the responsible use of our shareholders’ investment in Aphria, with a focus on profitable execution of our activities. The Company has consistently demonstrated the proven ability to generate positive EBITDA from its operating facilities. As the cannabis industry and the Company transitions from medical use to adult-use in Canada and to significant international exposure, the Company will continue to make targeted, measured and ROI proven investments in its growing portfolio of recreational brands, alternate uses of cannabis, including the transition of cannabis from a product to an ingredient, and international opportunities. However, in the short-term, investments could result in lower corporate adjusted EBITDA1.

During the quarter, the Company bolstered its position as one of the industry’s lowest cost producers. For the second consecutive quarter, the Company reported Cash costs of $0.95, remaining below $1.00. As previously disclosed, the Company’s “All-in” costs of dried cannabis per gram1 (“All-in costs“) increased minorly from $1.56 to $1.60, costs consistent with the additional staff levels added in advance of production capacity increases in the quarter.

The Company believes in full financial reporting transparency to shareholders and will continue to report financial metrics with an appropriate base of grams, or kilograms where relevant, to ensure shareholders are capable of properly comparing metrics amongst industry participants. Further, when reporting non-IFRS measures, the Company will continue to provide detailed disclosure, and transparency tied to its released financial statements.

Revenue for the three months ended May 31, 2018 was $12,026, representing a 17% increase over the prior quarter’s revenue of $10,267. The increase in the quarter was driven primarily by reporting Broken Coast results for a full quarter, compared to one month in the prior quarter, increased sales to medical patients at Aphria, all offset by the Company’s previously announced decision to discontinue wholesales sales to other licensed producers, to provide increased inventory for the eventual pipeline fill for adult-use and international market opportunities over the next six to nine months. Cannabis oil sales, as a percentage of volume, decreased from 33.1% to 29.2% in the quarter, largely driven by the significantly lower percentage of volume sales of oil purchased by Broken Coast medical patients.

For the year ended May 31, 2018, revenue was $36,917 versus $20,438 in the year ended May 31, 2017, an increase of 81%.

Adjusted gross profit for the fourth quarter was $9,468, with an adjusted gross margin of 78.7%, compared to $4,903with an adjusted gross margin of 85.7% in the prior year’s fourth quarter, representing an increase of over 90%. The increase in the adjusted gross margin from the prior quarter is consistent with the increase in revenues combined with improved cost structures.

Adjusted gross profit for the year was $27,912, with an adjusted gross margin of 75.6%, compared to $15,854, with an adjusted gross margin of 77.6%, representing an increase of over 75%. The increase in adjusted gross profit for the year is consistent with the Company’s increase in revenue over the period.

Net loss for the three months ended May 31, 2018 was $4,992 or $0.06 per share, as opposed to a net loss of $2,593 or $0.02 per share in the prior year. The decrease in net income for the quarter relates to $6.5 million in incremental share based compensation, $3.3 million of costs associated with Aphria International, $8.6 million in net losses on the Company’s investment portfolio, all offset by almost $13.0 million in incremental gross profit.

Net income for the year ended May 31, 2018 was $29,448 or $0.18 per share, as opposed to $4,198 or $0.04 in the prior year. The increase in net income for the year relates to fair value adjustments associated with biological assets and unrealized gains on the Company’s investment portfolio.

Adjusted EBITDA from ACMPR operations1 for the fourth quarter was $2.2 million compared to $2.5 million in the prior year. The decrease in adjusted EBITDA from ACMPR operations1 relates to $1.9 million in incremental selling, general and administrative expenses associated with preparations for adult-use, offset by $1.5 million of additional adjusted gross profit1. Adjusted EBITDA1 loss for the fourth quarter was $0.6 million, compared to adjusted EBITDA1 of $2.5 million in the prior year. The difference between adjusted EBITDA from ACMPR operations and adjusted EBITDA1 is the $2.8 million adjusted EBITDA1 loss on Aphria International operations.

Adjusted EBITDA from ACMPR operations1 for the year ended May 31, 2018 was $8.4 million compared to $5.5 million in the prior year, an increase of 53%. The increase in adjusted EBITDA from ACMPR operations1 relates to capacity increases at Aphria One, the acquisition of Broken Coast offset by larger selling, general and administrative expenses. Adjusted EBITDA1 for the year was $5.6 million compared to $5.5 million in the prior year.

Recent News

View All News Items

Latest Article

How Britney Guerra Transitioned from Cannabis Activist to Running a Legal Retail Store

How Britney Guerra Transitioned from Cannabis Activist to Running a Legal Retail Store

Britney Guerra is a businessperson and cannabis activist who has seen the industry’s transition from prohibition to a legal and regulated industry that contributes to the Canadian economy. She began her career in Vancouver, working as an advertising manager for Cannabis Culture, an online magazine for the cannabis subculture. Today, she is the general manager of Brant Cannabis, a retail store in Brantford, ON, focused on selling quality products plus educating customers and the community on the drug’s many benefits.

Read Article