SmallCapPower | April 26, 2018: Aphria Inc. (TSX:APH) recently reported 100% YoY hike in revenue to $10.27 million for Q3 2018 vs. $5.12 million in Q3 2017. The strong jump in revenue was on the back of continued growth of both wholesale shipments and sales to existing patients, Broken Coast's sales from February 1st to 28th, further acceleration of patient on boarding and an increased average selling price. On a quarterly basis, revenue increased 20.6% from $8.50 million in the second quarter of FY 2018.
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Aphria's gross profit surged 140% to $8.57 million compared to $3.57 million for the three months ended February 28, 2018, driven by larger patient base, improvement in cost per gram metrics, one-month sales from Broken Coast offset by changes in the fair value adjustment for biological assets. The Company's gross margin was impressive at 83.5% in Q3 2018 vs. 72.9% in Q2 2018.
Exhibiting robust growth of 161.5%, Aphria's net income for Q3 2018 came in at $12.95 million, or $0.08 per share, compared to $4.95 million in Q3 2017, or $0.04 per share. The Company's net income growth can be attributed to the continued strength of Aphria's investment portfolio, including its realized gain on the sale of its non-escrowed shares in Liberty Health Sciences, Ltd. in the quarter.
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Aphria reported positive adjusted EBIDTA for the 10th consecutive quarter, an increase of 238% to $2.94 million in Q3 2018.
Aphria CEO Vic Neufeld remarked, "Looking ahead, our focus remains on exploring strategic opportunities and partnerships globally while continuing our extensive preparations for the coming legalization of the adult-use market in Canada. Backed by expertly-researched consumer insights, we will begin to introduce our diverse portfolio of adult-use brands, while continuing to support our extensive product mix and patient base on the medical side. Our Part IV expansion at Aphria One is on schedule for completion in early 2019 along with our Aphria Diamond facility, ensuring we will have ample capacity to meet the expected demand in Canada and across our international markets. All told, Aphria continues to solidify its standing as a market leader in Canada and as a leading player on the international stage."
Aphria is expanding its production facilities and expects to finish within the timeframe - 700,000 square foot Part IV expansion project of Aphria One, first sale continues to be expected in January 2019; 1,300,000 square foot retrofit project of Aphria Diamond, first sale continues to be expected in January 2019; and, awaiting Health Canada approval for Phase III Broken Coast site while Phase IV expansion project has been modified to increase capacity but first sale expectations moved to fall 2019.
In the third quarter ended February 28, 2018, Aphria completed the acquisition of 99.86% of Broken Coast Cannabis, announced the acquisition of Nuuvera and divestiture process for U.S. passive assets, and additional investments of $10,000 in Hiku Brands Company and $2,483 in Althea Company.
Aphria trades at a market capitalization of $2.11 billion on the TSX with price-to-book multiple of 2.20x. After reporting Q3 results, the Company's stock price rose 7% to close at $12.24 on April 16.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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