- Aphria stock fell as much as 14% on Monday after reporting sales and operating income that missed analyst forecasts.
- The Canadian cannabis producer turned in revenue of $153.6 million and a $361 million net loss.
- CEO Irwin Simon said, “The duration and impact of lockdowns…were greater than we initially anticipated.”
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Canadian cannabis producer Aphria saw its stock fall as much as 14% on Monday after the company turned in a disappointing fiscal third-quarter earnings report.
Aphria said it generated revenue of $153.6 million in the quarter compared to analysts’ consensus expectations for $163.3 million. Revenue was up 6.4% year-over-year, but sequentially it fell 4.3%.
Adjusted EBITDA came in at $12.7 million in the fiscal third quarter, which was below analyst consensus estimates for $14.9 million.
Aphria also turned in a record net loss of $361.0 million, or $1.14 per share, in the fiscal third quarter. The loss was partly due to increasing production costs at the firm.
The cash cost to produce dried cannabis per gram rose 13.9% quarter-over-quarter in Aphria’s quarterly report and adjusted cannabis gross margin sank to 39.2% vs. 45.9% in the prior quarter.
The Leamington, Canada-based company saw its cannabis sales fall to 18,695 kgs in the fiscal third quarter as well, a decrease of 30.1% compared to the fiscal second quarter.
The company’s CEO Irwin Simon pointed to the impact of lockdowns as his reasoning for the disappointing results.
“The duration and impact of lockdowns across many of the regions we operate in, particularly in Canada, were greater than we initially anticipated for the cannabis industry and our business; however, we believe Aphria remains well-positioned with our leading brands and market share to experience a robust increase in our top-line as the market improves.” the chief executive officer wrote in a press release.
One bright spot in the fiscal third-quarter report came from SweetWater, a cannabis brewing company Aphria acquired for $300 million in 2020. SweetWater saw sales climb from $0.9 million last quarter to nearly $15 million.
Aphria is set to merge with fellow cannabis producer Tilray to make the largest cannabis company in the world in terms of revenue pending shareholder approval on Wednesday.
The combined company has plans to continue its international expansion as the regulatory environment for cannabis producers and retailers continues to improve.
Aphria traded down 11.80% as of 10:07 a.m. ET on Monday.