Aphria Shares Drop Modestly On News of CEO Vic Neufeld’s Departure

Aphria announces earnings as well as CEO departure.

Aphria, Inc. (NYSE: APHA)

Shares of Aphria, Inc. ticked lower in the premarket session Friday after the company confirmed the departure of its Chief Executive Vic Neufeld. The Canadian-based marijuana grower said Mr. Neufeld will leave in the coming months, sending its shares down 2.4% to $6.42.

Co-founder Cole Cacciavillani is also set to exit the company, which has been rocked by short-seller allegations. Aphria shares have lost more than 17% since Dec. 3 after short sellers Quintessential Capital Management and Hindenburg Research said that the cannabis producer offered its Caribbean and Latin America assets at inflated prices to insiders.

Aphria dismissed the accusations as “false and defamatory” and established a special committee to examine the transactions. The company has also posted its first quarterly financial results since making its debut the New York Stock Exchange.

APHA Earnings & Outlook

Net income for the second quarter ended Nov. 30, 2018, was C$54.8 million, or C$0.22 a share, compared to C$6.5 million, or C$0.05 per share for the same period last year. Net revenue came to $21.7 million, up 63% from $13.3 million in the prior quarter and 155% from $8.5 million in the same three months last year.

Aphria attributed the solid revenue growth to a 92% rise equivalents kilograms sold and a further $1.6 million of non-cannabis global sales. The company sold 1,900 kilogram equivalents of cannabis in the newly legalized recreational cannabis market in Canada.

Medical cannabis sales decreased marginally to 1,443.6 kilogram equivalents in the second quarter, from 1,466.2 kilogram equivalents sold in the first quarter. The company said the cash cost to produce dried cannabis increased from C$1.30 a gram in the first quarter to C$1.76 in the second quarter.

Aphria CEO Comments

“In our second quarter, Aphria continued strengthening its position as a premier supplier of medical- and adult-use cannabis to the Canadian market, building long-term competitive advantage and developing key global opportunities,” said Vic Neufeld.

“This is the first quarter to partially include adult-use sales, helping to drive 63% quarter-over-quarter net revenue growth, as did continued strength in sales to the medical-use market.  As expected, gross margins declined, reflecting lower effective selling prices in the adult-use market, as well as temporarily lower yields and higher production costs in the quarter as we moved aggressively to build out production facilities and implement new automation processes.”

Aphria, Inc. Profile

Aphria, Inc. engages in the production and supply of medical cannabis. Its products include cannabis capsules, oral solutions, concentrate syringes and tetrahydrocannabinol and cannabidiol vaporizers. The company was founded by Cole Cacciavillani and John Cervini on June 22, 2011 and is headquartered in Leamington, Canada. – CNN Money