Aphria expects $650- $700 million income for 2020

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Leamington, Ontario – November 7, 2019 – Aphria Inc. (“Aphria” or the “Company”) (TSX: APHA and NYSE: APHA), today announced its participation in the Jefferies West Coast Consumer Conference on November 12, 2019 in San Francisco, California.

The Company’s Chief Financial Officer Carl Merton will be holding pre-scheduled one-on-one meetings.

Forward-Looking Information

In the Issuer’s fourth quarter earnings press release dated August 1, 2019, the Issuer provided guidance for its 2020 revenue of $650-700 million of sales, with distribution revenue representing slightly more than one half of the total net revenue and $88-95 million of Adjusted EBITDA.

The Issuer arrived at this revenue guidance based on the following:

Aphria Inc. to Participate in Jefferies West Coast Consumer Conference

  1. The increase in cannabis revenue is driven by three factors:
  2. Incremental capacity at the Issuer Aphria One facility. During the fourth quarter ended May 31, 2019, the Issuer received full licensing for this facility, which is expected to have a capacity of 110,000 kgs. As a result of the time period to ramp up the facility, the Issuer’s sales in the fourth quarter ended May 31, 2019 were only 20,000 kgs, if annualized. During fiscal 2020, the Issuer has and will be ramping up its production capability to reach its expected annualized capacity;
  3. Incremental capacity at the Issuer’s Aphria Diamond facility. Aphria Diamond’s annualized capacity is expected to be 140,000 kgs. Aphria Diamond received its license for this facility on November 1, 2019. The ramp up period for Aphria Diamond will mirror the ramp up period experienced at the Aphria One facility. The Issuer notes that sales of 20,000 kgs of production grown at the Aphria Diamond facility before fiscal year-end are expected to generate between $80,000,000 and $100,000,000 of revenue; and
  4. Incremental revenue earned on production that is sold through international channels versus in Canada. The Issuer anticipates that prior to the end of calendar 2019, it will receive EU-GMP certification on at least two of its global facilities. Sales of EU-GMP certified cannabis have historically resulted in average selling prices higher than current wholesale prices in Canada.

Major risk factors relating to the assumptions above include:

  1. No substantial crop losses. Historically Aphria has not experienced any significant crop losses and Aphria, like other growers, plants and generates product from greenhouse and indoor facilities which reduce the impact of unpredictable weather patterns. However, crop loss due to disease or pests is always a risk and Aphria has highly experienced staff and processes in place to mitigate these risks.
  2. Aphria Diamond production ramp consistent with Aphria One’s ramp up of Part IV or better. Aphria’s experience and past performance has demonstrated a two to three-month period before first harvest in a new expansion. Management believes that Aphria Diamond production will be consistent with past practice.
  3. Receipt of EU-GMP certification during the third quarter ended February 2020 and any changes in government policy, regulation or licensing review process related thereto.
  4. Sufficient international demand for product that any sales headwinds in Canada are offset by international demand. Aphria believes that international demand for medicinal cannabis is on the rise as more European countries legalize its use and prescription, and will broaden Aphria’s revenue base, further reducing dependence on the Canadian market.
  5. Consistent average selling price equal to fourth quarter average selling price. As of the second quarter of full sales since legalization, the Issuer is able to better determine a market price and focus on the most profitable products ensuring it is able to combat any price compression.

We Have A Good Thing Growing

For more information, visit: aphriainc.com

This article is written and published by The Cannabis Stock

Disclaimer : The Cannabis Stock wants to promote the cannabis market with the best publication on the market. The Cannabis Stock does not recommend selling or buying any of the company mentioned and is not responsible for any losses that may result.

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