Aphria Inc. has suspended its outlook for the year even though it has avoided some of the COVID-19 effects that have ravaged competitors.
Executives from the Leamington, Ont., company revealed Wednesday that its third quarter, which ended Feb. 29, delivered $144.4 million in net revenue, up from $73.6 million in the same quarter a year earlier.
The company beat analyst expectations that suggested it would report $131.25 million in revenue in the quarter.
Aphria reported net income of $5.7 million or two cents per diluted share for the quarter, compared with a net loss of $108.2 million or 43 cents per diluted share in the same quarter last year.
The news caused Aphria's stock to shoot up 11 per cent to $5.66 in morning trading.
"We've always taken most likely the most conservative view of fair value and as a result, we haven't had to pay the price that other people have had to pay for that aggressiveness," said Carl Merton, Aphria's chief financial officer, on a call with analysts.
His remarks come as his rivals have reported mass layoffs and writedowns and warned of bad days ahead for cannabis companies.
Moncton-based Organigram Holdings Inc. temporarily cut 400 workers and 200 were impacted in a similar move by Smiths Falls-headquartered Canopy Growth Corp.
Aphria, which is behind the Solei, RIFF, Good Supply, Broken Coast and Aphria Medical brands, has avoided layoffs but is finding it hard to predict how it could be affected by the pandemic.
Despite saying it was on track to meet its revenue expectations of between $575 million and $625 million for the year, Aphria said it suspended its guidance for the fiscal year until further notice and was watching the impacts of COVID-19 closely.
Merton rattled off a list of recent events the company was facing, including the Ontario, Alberta and British Columbia control boards being closed to deliveries and shipments for a week at the end of March.
The Ontario control board, he said, temporarily cancelled two weeks of purchase orders from all licensed producers while it assesses its inventory balances and is generally expecting to need lower volumes due to COVID-19.
Meanwhile, he noted Alberta control boards replenishments are down 40 per cent since COVID-19 and B.C. retail stores are closing amid COVID-19 concerns, but is trying to convert their brick-and-mortar locations to click-and-collect models.
There have been some bright spots in the Quebec market, where sales are generally higher, and in the medical business, Merton said.
"In Quebec, e-commerce sales are up 200 per cent since COVID-19 restrictions came into place, and the sales at their brick-and-mortar locations are up 40 per cent," he said.
"Additionally, our medical sales are up 18 per cent since COVID-19 restrictions came into place. Although we proactively decreased selling prices 10 per cent to help patients manage current cash flow concerns."
The pandemic has also affected the company's operations and workforce.
Irwin Simon, the company's chief executive, said Aphria has started staggering work schedules, redesigning facilities to facilitate physical distancing and "significantly" enhancing sanitation and cleaning procedures.
At its Aphria One cultivation facility, the company accelerated a planned wage increase for all hourly employees and implemented a paid lunch program.
"Our leadership had a plan in place ahead of this, and I'm proud to say we took decisive action and executed well," said Simon.
This report by The Canadian Press was first published April 15, 2020.
Companies in this story: (TSX:APHA, TSX:OGI, TSX:WEED)
Tara Deschamps, The Canadian Press