By Eric Vengroff, Financial Analyst, Cannabis Daily
Leamington, Ontario – August 1, 2018 – Aphria Inc. (TSX: APH or USOTCQB: APHQF) today reported its results, for the fourth quarter and year ended May 31, 2018. All amounts are expressed in Canadian dollars. Increased costs of $1.9 million in incremental selling, general and administrative expenses associated with preparations for adult-use weighed on the quarterly results but were offset by higher operating margins.
The company posted adjusted EBITDA of $2.2 million from ACMPR operations in the quarter and $8.4 million for the year, a 38% increase over the prior year. Cash costs to produce dried cannabis per gram were $0.95, a decrease of $0.01 in the quarter, remaining below their $1.00 target.
The company has also signe MOU’s with British Columbia, Alberta, Manitoba, Quebec, New Brunswick and the Yukon Territory, with more to follow.
“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.”
The Company’s “All-in” costs of dried cannabis per gram increased by 4 cents/g from $1.56 to $1.60.
Net loss for the three months ended May 31, 2018 was $4.9 million or $0.06 per share, up from $2.6 million 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.
Adjusted EBITDA from ACMPR operations for the fourth quarter was $2.2 million compared to $2.5 million in the prior year. The decrease in adjusted EBITDA from ACMPR operations 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 profit. Adjusted EBITDA loss for the fourth quarter was $0.6 million, compared to adjusted EBITDA of $2.5 million in the prior year. The difference between adjusted EBITDA from ACMPR operations and adjusted EBITDA is the $2.8 million adjusted EBITDA1 loss on Aphria International operations.
Adjusted EBITDA from ACMPR operations 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 operations relates to capacity increases at Aphria One, the acquisition of Broken Coast offset by larger selling, general and administrative expenses. Adjusted EBITDA for the year was $5.6 million compared to $5.5 million in the prior year.
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