Aphria reported a net loss of 8 million Canadian dollars ($6.2 million) for the second quarter ending Nov. 30, 2019, and the Canadian cannabis producer lowered its fiscal 2020 revenue outlook.
Aphria’s net revenue for the three month period was CA$120.6 million, down from the previous quarter’s CA$126 million and lower than analyst expectations.
Net income also took a turn lower.
Aphria’s second quarter net income of minus-CA$8 million is a substantial downturn from the first quarter’s net income gain of CA$16.4 million.
The quarter’s adjusted EBITDA increased slightly to CA$1.9 million, about in line with expectations.
Canaccord Genuity analyst Matt Bottomley had expected Aphria to report net revenue of almost CA$130 million and adjusted EBITDA of CA$2.2 million.
Citing regulatory hurdles in Ontario, Alberta, Germany and by the Canadian federal government, Aphria lowered its guidance on net revenue to CA$575 million-CA$625 million, a slight decrease from the previously disclosed expected net revenue of CA$650 million-CA$700 million.
The company also lowered its guidance for adjusted EBITDA to CA$35 million-C$42 million, down from the previous CA$88 million-CA$95 million
For the lower guidance the company cited:
- A slower than expected retail location rollout in Ontario.
- The temporary ban on vape products in Alberta.
- The amount of time it took Health Canada to fully license its Aphria Diamond facility.
- Slower CC Pharma growth as a result of recent changes in the German government’s medical reimbursement model.
The company also announced that interim CEO Irwin Simon will continue as permanent CEO, effective today.
Simon had been interim CEO since the previous CEO was stepped down in February 2019 after a period of significant volatility for the company.
Aphria also said Jodi Butts has been elected to the board.
Aphria ended the second quarter with CA$498 million of cash and cash equivalents.