Provides an Update on Forward-Looking
Information
LEAMINGTON, ON, Nov. 7, 2019 /CNW/ - 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.
|
Q4 to 2020 revenue
forecast reconciliation
|
|
Low
|
High
|
Q4 revenue annualized
(rounded 000,000's)
|
514,000,000
|
514,000,000
|
Incremental cannabis
revenue
|
136,000,000
|
186,000,000
|
2020 revenue
guidance
|
650,000,000
|
700,000,000
|
i. The increase in cannabis revenue is driven by three
factors:
A.
|
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;
|
B.
|
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
|
C.
|
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:
a)
|
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.
|
b)
|
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.
|
c)
|
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.
|
d)
|
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.
|
e)
|
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
About Aphria Inc.
Aphria Inc. is a leading global
cannabis company driven by an unrelenting commitment to our people,
the planet, product quality and innovation. Headquartered in
Leamington, Ontario – the
greenhouse capital of Canada –
Aphria Inc. has been setting the standard for the low-cost
production of high-quality cannabis at scale, grown in the most
natural conditions possible. Focusing on untapped opportunities and
backed by the latest technologies, Aphria Inc. is committed to
bringing breakthrough innovation to the global cannabis market. The
Company's portfolio of brands is grounded in expertly-researched
consumer insights designed to meet the needs of every consumer
segment. Rooted in our founders' multi-generational expertise in
commercial agriculture, Aphria Inc. drives sustainable long-term
shareholder value through a diversified approach to innovation,
strategic partnerships and global expansion, with a presence in
more than 10 countries across 5 continents.
For more information, visit: aphriainc.com
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Certain
information in this news release constitutes forward-looking
statements under applicable securities laws. Any statements that
are contained in this news release that are not statements of
historical fact may be deemed to be forward-looking statements.
Forward looking statements are often identified by terms such as
"may", "should", "anticipate", "expect", "potential", "believe",
"intend" or the negative of these terms and similar expressions.
Forward-looking statements in this news release include, but are
not limited to, 2020 revenue guidance and statements with respect
to expected incremental production capacity and sales through
international channels. Forward-looking statements necessarily
involve known and unknown risks, including, without limitation,
those set forth above under the "Forward Looking Information"
section; risks associated with general economic conditions; adverse
industry events; marketing costs; loss of markets; future
legislative and regulatory developments involving cannabis;
inability to access sufficient capital from internal and external
sources, and/or inability to access sufficient capital on
favourable terms; the cannabis industry in Canada generally, income tax and regulatory
matters; the ability of Aphria Inc. to implement its business
strategies; competition; crop failure; currency and interest rate
fluctuations and other risks.
Readers are cautioned that the foregoing list is not exhaustive
and should carefully review the various risks and uncertainties
identified in the Company's filings on SEDAR and EDGAR. Readers are
further cautioned not to place undue reliance on forward-looking
statements as there can be no assurance that the plans, intentions
or expectations upon which they are placed will occur. Such
information, although considered reasonable by management at the
time of preparation, may prove to be incorrect and actual results
may differ materially from those anticipated.
The forward-looking statements included in this news release are
made as of the date of this news release and the Company does not
undertake an obligation to publicly update such forward-looking
statements to reflect new information, subsequent events or
otherwise unless required by applicable securities laws.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement.
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SOURCE Aphria Inc.