Aphria Inc (TSX: APHA) (NYSE: APHA) announced this morning revenues of $126.11 million, a decline from the previous quarters revenues of $128.56 million. Cannabis revenue increased to $30.78 million from $28.60 million in the prior quarter, while distribution revenue decline from $99.18 million to $95.32 million.
The good news for Aphria investors, is that the quarter marks the second in a row wherein the firm has reported profitable operations. The bad news, is that it is still not a cash flow positive operation. Aphria posted a positive net income of $16.44 million for the quarter, or $0.07 per share. However, during the same time period the firm burned through over $101.59 million in cash, demonstrating that its a long way from being cash flow positive.
Looking at the balance sheet, Aphria’s cash position fell from $550.79 million to that of $449.20 million. Meanwhile, accounts receivable climbed from $25.48 million to $47.26 million. Inventory and biological assets also rose, from $91.52 million and $18.72 million to $112.98 million and $29.88 million respectively, as supply continues to outpace demand across the sector. Total assets decreased from $2,441 million to $2,433 million over the quarter.
In terms of liabilities, accounts payable actually decreased during the quarter which is currently a rare event in the cannabis sector. Last quarter the firm reported $105.81 million in payables, while this quarter the figure decreased to $90.77 million. Total liabilities decreased over the quarter from $708.43 million to $678.24 million.
Inventory in virtually all cannabis segments rose over the quarter, with softgels being the only exception. Here’s the breakdown.
| Product | Q4 | Q3 | % Change |
| Cannabis | 9,760.1 KG | 6,309.9 KG | 54.7% |
| Cannabis Trim | 2,275.0 KG | 1,908.0 KG | 19.2% |
| Cannabis Oils | 37,855.3 L | 28,458.1 L | 33.0% |
| Softgels | 819.7 L | 982.0 L | -16.5% |
Aphria in total sold 5,969 kilograms equivalent of cannabis over the quarter, an increase from 5,574 kilograms in the fourth quarter of 2019. However, the firm saw its all in cost of production increase from $2.35 per gram to $2.52 per gram. Total revenue per medical gram decreased from $7.66 to $7.52, however revenue per recreational gram increased from $5.73 to $6.02 per gram.
Aphria also reaffirmed guidance for the fiscal year, guiding towards $650 – $700 million in net revenues for the year, of which distribution revenue will consist of “slightly more than half of the total net revenue.” Inherently, this implies that Aphria sees no growth within its distribution operations, while cannabis revenues are expected to grow substantially in comparison, with estimates of $300 to $350 million in cannabis revenues for the year, assuming cannabis represents roughly half of all net revenues.
Aphria is currently trading at $5.14 per share in pre-market trading on the New York Stock Exchange, up 17.89% on today’s earnings.
Information for this briefing was found via Sedar and Aphria Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
