x min read


Written by
Richard Sandle
Published on
July 18, 2017
Copy URL
Share on LinkedIn
Share on Reddit
Share on Twitter/X
Share on Facebook

APHRIA INC COM NPV (OTCMKTS:APHQF) shares are in the midst of a strong upward spike with higher than average volume which started on July 12, 2017. The upward move continues with today’s closing (July 17, 2017) of $4.90 very near the high of the day.

The upward move came on the heels of Aphria Inc releasing its quarterly and annual financial reports.Before we delve into the details, a little background on the company, Aphria Inc, one of Canada’s lowest cost producers, produces, supplies and sells medical cannabis. Located in Leamington, Ontario, the greenhouse capital of Canada. Aphria is truly powered by sunlight, allowing for the most natural growing conditions available. Aphria is committed to providing pharma-grade medical cannabis, superior patient care while balancing patient economics and returns to shareholders. Aphria was the first public licensed producer to report positive cash flow from operations and the first to report positive earnings in consecutive quarters.On July 12, 2017 Aphria Inc reported its results for the fourth quarter and year ended May 31, 2017. Revenue for the three months ended May 31, 2017 was C$5,717,866, representing a 11.7% increase over the prior quarter's revenue of C$5,188,516, in a quarter in which the Company was capacity constrained. The Company's exceptional March and May harvests, along with its inventory levels, allowed the Company to sell more than its expected quarterly production of 650 kgs. Cannabis oil sales, as a percentage of all revenue, continued to grow in the quarter, increasing to 32% of revenue. For the year ended May 31, 2017, revenue was C$20,438,483 versus C$8,433,929 in the year ended May 31, 2016, an increase of 142%.For the seventh consecutive quarter, the Company reported positive EBITDA. In the quarter, the Company reported $2.8 million in EBITDA, a 181% increase over the prior quarter and for the year ended May 31, 2017, reported $6.1 million in EBITDA, a 961% increase over the prior year.Adjusted gross profit for the fourth quarter was C$4,902,960 with an adjusted gross margin of 85.7%, generated from both retail and wholesale shipments of medical cannabis. 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 C$15,853,608, with an adjusted gross margin of 77.6%.Net loss for the three months ended May 31, 2017 was C$2,592,742 or C$0.02 per share as opposed to a net income of C$1,302,164 or C$0.02 per share in the same quarter in the previous year and an income before tax of C$4,950,250 or $0.04 per share in the previous quarter. The decrease in net income for Aphria in the quarter is directly related to the more than $5.5 million net loss on the Company's strategic investments in the quarter.Net income for the year ended May 31, 2017 was C$4,198,455 or C$0.04 per share versus net income of $397,961 in the prior year. Included in the net income for the 2017 year was a gain on the Company's investment portfolio of almost C$3.6 million and a write-off of the Company's intangible asset, related to its CannWay brand, of $3.5 million. Current market capitalization stands at $279.50 million, on 5.56 Billion shares outstanding as of July 14, 2017. Vic Neufeld, Chief Executive Officer of Aphria stated:

"We capped off another exceptional year at Aphria, with increased earnings and lowered all-in production cash costs that provides us with a considerable competitive advantage. We increased our capacity expectations, continued to license the use of the Aphria Know-How System to expand our proven operational expertise, made progress on our expansion into the US market - all while maintaining our commitment to delivering clean and safe cannabis. The investments and progress we made in 2017 have positioned Aphria for continued profitable growth, in both the short and long term."

In other news, Aphria Inc announced on July 4, 2017 that it entered into a major wholesale supply agreement with HydRx Farms, Ltd. (o/a Scientus Pharma). Under the terms of the Agreement, Aphria is committing to supply over 25,000 fully grown medical cannabis plants over the next 12 months to Scientus Pharma. The first delivery, under the agreement will occur in the middle of Aphria's second quarter of 2018. Aphria expects to generate over $1.2 million of revenue from the wholesale supply agreement in each full quarter of shipments, with gross margins consistent with previously executed wholesale agreements. Scientus Pharma is a vertically-integrated biopharmaceutical company that produces cannabinoid products from medical-grade to pharmaceutical-grade.Aphria Inc is executing its strategy effectively. This will continue to reflect in its stock price. We will be updating our subscribers as soon as we know more. For the latest updates on APHQF, sign up below!Image courtesy of GoToVan via FlickrDisclosure: We have no position in APHQF and have not been compensated for this article.

Discover Hidden Gems

Don't miss the next big opportunity. Subscribe for timely alerts on potential market movers.