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article imageAphria shares tumble as company posts loss and writes down assets

By Karen Graham     Apr 15, 2019 in Business
Shares of Canadian cannabis maker Aphria were down more than 12 percent in trading Monday after the company swung to a fiscal third-quarter loss despite soaring revenue.
Even though revenues soared for the Ontario-based cannabis producer, a $50-million non-cash impairment on its Latin American assets ended up hurting the company's bottom line, according to CBC Canada.
In December, Aphria came under attack by short-sellers over the price it had paid for its Latin American assets. As a result, the company's shares dropped 50 percent before recovering. This was reflected in the $108.2 million loss in Aphria's third-quarter as it took a one-time non-cash charge related to the LATAM assets.
“The Ontario Securities Commission requested as part of a continuous disclosure review that the Company perform an impairment test on its LATAM assets subsequent to the filing of the 2019 second quarter financial statements . . . the company determined that a $50 million non-cash impairment charge was required,” the company stated in a release.
“The basis for this impairment arises from the company's reassessment of the discount rate and the financial forecasts for these entities as a result of new financial information received from the financial advisors to the Special Committee who reviewed the LATAM transaction.”
Aphria's loss for the third quarter amounted to 43 cents per share compared with a profit of $12.9 million or eight cents per share in the same quarter last year. Net revenues for the quarter that ended on February 28 were $73.6 million, up from $10.3 million a year earlier.
Aphria also showed a decrease in the amount of cannabis sold for the quarter - amounting to 2,636.5 kilograms sold from 3,408.9 kilograms sold in the previous quarter. However, the average selling price increased to C$8.03 per gram from C$7.51 per gram.
Toronto-listed shares as of 10:24 a.m. EDT: $8.65-1.45 (-14.36%).
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