After swinging to a profit on GAAP basis and reporting a rise in revenue for the fourth quarter of 2019, Aphria’s (NYSE: APHA, TSX: APHA) stock rallied 41% on NYSE and 40% on TSX. Let’s look at some important highlights of Aphria’s Q4 2019 earnings conference call.
Extraction Center of Excellence
The Extraction Center of Excellence, which the company committed to complete in the month of June during third quarter earnings call, is nearing completion and this facility is located on the same property as Aphria Diamond, which requires Health Canada’s approval.
US Expansion Strategy
Aphria said that there are challenges in the US with regards to the legalization and it has got plans for the US, which includes partnerships, acquisitions and strategic alliances.
The lot revenue from German license win is expected to start in fiscal 2021. In the interim period, the company believes that the EU-GMP facilities will be up and it expects to get additional revenue through Germany.
Canadian Cannabis Sales Guidance
On annualized basis, Aphria expects revenue of C$500 million, once all of its facilities are in full crop rotation at all facilities, and revenue of C$1 billion by the end of calendar year 2020.
There were no questions this time from the analysts on the search for a permanent CEO. Last quarter, Chairman and interim CEO Irwin Simon said that the company has not yet started the search for a permanent CEO.
Aphria’s strong performance lifted other cannabis producers’ stock prices on Friday. Cronos Group (NASDAQ: CRON), which reports its recently ended quarter results on August 8, ended up 8.7%. Tilray (NASDAQ: TLRY), Aurora Cannabis (NYSE: ACB) and Canopy Growth (NYSE: CGC), were up 7.2%, 8.2%, and 4.9%, respectively.
Based on the strong results from the final quarter of fiscal 2019 and the opportunities ahead, Aphria management showed optimism throughout the call.
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