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by Stockwatch Business Reporter

The Canadian Securities Exchange Composite Index rose 12.52 points to 452.36 Tuesday, lifted by positive results from Aphria Inc. (APHA). Aphria jumped 96 cents to $7.17 on 13.3 million shares after reporting its second straight profitable quarter. The company earned $16.4-million in the fiscal first quarter (ended Aug. 31, 2019), up from earnings of $15.8-million in fiscal Q4. Aphria's $16.4-million profit from this quarter is largely the result of fair value adjustments. (Under accounting rules, fair value adjustments for cannabis companies count newly produced marijuana/cannabis products as revenue (before it is even sold), minus production expenses.) The company had a net gain of $17.8-million on these fair value adjustments in fiscal Q1.

Aphria's total revenue of $126.1-million in fiscal Q1 was slightly down from the $128.6-million that it recorded in the previous quarter, and below analyst expectations of $130.6-million. The decrease is the result of a small decline in revenue from Aphria's German distribution business, CC Pharma. That decline was partially offset by increased net revenue on cannabis sales, which reached $30.8-million in Q1, up from $28.6-million. It could have been a more significant increase, but Aphria lost an estimated $1.5-million of cannabis sales as a result of a fire at its Broken Coast facility on Vancouver Island. While Aphria's cannabis sales were up, so were its costs to produce that cannabis; Aphria spent $1.43 per gram in fiscal Q1, compared with $1.35 in the quarter before.

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