Aphria Inc (OTCMKTS:APHQF is a company on the rise. With the continuous pursuit of its expansion strategy and the positive reaction to its recently released third-quarter results, it is safe to say the firm will remain in the news for a while yet.
In this piece, we provide our reader with information on the company and recent moves by its management to keep ahead. Take a look at the stock’s price action:
Aphria Inc. was established in June 2011 by Cole Cacciavillani and John Cervini and has its head office in Leamington, Canada.
The firm is reputed to be one of Canada’s most cost-efficient producers which engage in the production, supply, and sale of medical cannabis. It also provides support services in the form of medical consultations, group therapies, and rehabilitation to veteran and first responders. Using online stores and mobile phones, the sells its products to retail consumers, while engaging in the wholesale sipping of medical marijuana plant cuttings and dried buds to approved resellers and producers.
The firm truly deploys solar energy, which allows for natural growing conditions. It has also made public its dedication to delivering pharmaceutical-grade cannabis, enhanced care for patients while ensuring efficient use of resources and maximizing shareholder returns. Aphria Inc. is the first publicly licensed producer to records positive operating cash flow and also the first to record profits in successive quarters.
Supply Agreement with SAQ
Earlier in this month, the firm reported that it had sealed the previously discussed supply agreement with the Société des alcools du Québec (SAQ). The agreement is a three-year agreement for the supply of high-quality, safe and clean cannabis products for sale in the Quebec adult-use market up to 12,000 kg per year. This will be accomplished through the Société québécoise du cannabis’ (SQDC) retail outlets and e-commerce platform.
CEO of Aphria Inc., Vic Neufeld explained management’s pleasure in finalizing this agreement with the SAQ and remain enthusiastic about supplying the Quebec adult-use market with their variety of safe, high-quality pure cannabis products. The firm’s product and brand portfolio have been specifically designed to meet the requirements of very different market divisions, and its leadership plans to offer adult-use consumers in Quebec a unique choice.
With a completely-funded production capacity of roughly 0.23 million kg by early 2019, Aphria is extremely well positioned to supply the anticipated adult-use demand across Canada, which includes the country’s second-largest market. According to the terms of the agreement, Aphria will supply the future SQDC with a number of branded cannabis merchandises from the firm’s adult-use brand portfolio, which is set to encompass cannabis oils and other derivative products and several strains of high-quality grown dried cannabis flower.
The firm’s financial statements reveal that revenues jumped significantly from $6.45 million in 2016 to $15.1 million, an improvement of over 100%. The firm recorded negative operating income $1.0 million but was able to record profits of $3.2 million, due to income from other operations.
The firm is not very highly leveraged with only $23 million worth of long and short-term debt are on its balance sheet and current assets of $132 million. This combined with its very high liquidity would only help to boost the attractiveness of the company to investors.
From the recent quarterly reports, the company reported that for the tenth consecutive quarter, it has reported positive adjusted EBITDA. In the last quarter, the firm reported $2,940 in its adjusted EBITDA, a 238% increase over the prior year.
The firm continues to specialize in product innovation for both the medical and recreational market while working on its expansion strategy within the local and global markets and implement its strategic plan to maximize shareholder value.
Sales revenue which ended in February 2019 was $10,267 an improvement over $5,119 in the same period of the prior year, and $8,504 in the second quarter of 2018, an increase of over 20%. The upsurge in revenue from the same period in the previous year is a result of sales in the month of February as well as continued acceleration of patient onboarding and an increased average selling price. Another cause was the continued growth of both wholesale shipments and sales to existing patients.
Net income for the quarter was recorded $0.08 per share, a major jump from the net income of 0.04 per share compared to a similar period of the previous year, an increase of more than 161%.
Aphria has proven its mettle and this positive trend looks set to continue.
Disclosure: We have no position in APHQF and have not been compensated for this article.