Aphria shares gain 17 per cent after surprise Q1 profits
Canadian cannabis company beats expectations and recovers from big drop
Shares in the Canadian cannabis firm Aphria (APHA) rose significantly in premarket trading as the company posted a surprise profit.
The US-listed company said it had a net income of C$16.4m (US$12.4m) for its first fiscal quarter. Revenue rose by C$13.3m year-on-year to C$126.1m.
The company mostly caters to the recreational market, selling 3,317 kg this year, but also to the medical market, selling 1,354 kg. The company said it expects fiscal revenue for 2020 of between C$650 million to C$700 million.
Aphria’s stock has fallen 17 per cent so far this year. Investors were consequently bracing themselves for poor performance in the days preceding the statement. Stocks dropped by around 7.4 per cent on Friday, closing at US$4.71.
Following the report acting CEO Irwin D Simon stated: “Our success was also driven by our international business and the strength and growth of our brands, particularly Broken Coast, despite a small fire at our British Columbia facility at the end of the quarter.”
Investors are likely to return to Aphria because it is one of the few cannabis companies to post a profit since Canada legalised the drug last year. The report is not completely glowing however. Aphria’s sales declined quarter-on-quarter with the company missing its sales estimate.