Aphria (NYSE: APHA), one of the largest cannabis company in Canada, reported higher year-over-year financial results for its fiscal 2019 second quarter.
In addition, the company said that CEO Vic Neufeld and co-founder Cole Cacciavillani are going to “transition out of their executive roles over the coming months.”
Aphria Q2 Earnings
For the second quarter ended November 30, 2018, Aphria reported revenue of C$21.67 million, up from C$8.5 million in the same period last year. The company attributed higher revenue to a 92% increase in kilogram equivalents of cannabis sold and an additional $1.6 million of non-cannabis international sales.
Net income for the quarter was C$54.8 million, or C$0.22 per share, versus C$6.5 million, or C$0.05 per share, last year. “The increase in net income relates to gains on our long-term investment portfolio, primarily our divestitures of positions in Hiku Brands and Liberty Health Sciences,” the company noted in the earnings release.
Medical cannabis sales declined from 1,466.2 kilogram equivalents sold in the previous period to 1,443.6 kilogram equivalents sold in the second quarter. Cannabis oil sales decreased to 19% of overall sales from 39% in the prior quarter, reflecting the higher percent of dry bud sold in the adult-use market.
Gross profit for the quarter was C$5.98 million, down from C$6.20 in 2017. Meanwhile, adjusted EBITDA loss from Canadian cannabis operations for the quarter was $6.1 million, compared to a loss of $0.8 million in the prior quarter.
As of the end of the second quarter, the company had $152.1 million of cash and $32.7 million of liquid marketable securities.
Executive Transition
CEO Neufeld and co-founder Cacciavillani will transition out of their executive roles over the coming months but remain on the board, according to Aphria.
“When the Canadian medical cannabis market opened up five years ago, Cole was growing millions of potted flowers in Leamington, and he understood that cannabis was a natural product extension for the founding team’s decades of experience as greenhouse growers in Leamington,” Neufeld stated. “Now with legalization and globalization, including a huge market opportunity with positive developments in the U.S., Aphria’s next generation of leadership may take the reins. Building and leading a Company like Aphria, which exploded from an idea in late 2013 to our many successes to-date, has been an incredible journey, despite the toll it has taken on health, family and personal priorities.”
“Succession is the plan. Cole and I have informed the Board, and they have agreed, that we will begin the transition process immediately, and at the appropriate time, we will both step down from executive positions at Aphria” Neufeld concluded.
On Friday, shares of Aphria closed up 5.17%. Over the past three months, the stock has fallen 17.33%. Since the beginning of this year, shares are up nearly 16%.