CORONA VIRUS ATTACKING APHRIA SOON ? Coronavirus (“COVID-19”) Pandemic, Its Impact and Influence on Aphria’s Guidance [3]
The pandemic and its impact on the economy is constantly evolving and presents too many variables and contingencies to accurately forecast the Company’s fourth quarter results.
For instance any one of the following could have material impacts on Aphria’s anticipated fourth quarter revenue levels:
(i) the United Kingdom government, or any EU government of a country that materially supplies CC Pharma, closes its border to exports;
(ii) either the Alberta or Ontario government implements a more restrictive ‘shelter in place program’ or materially adjusts its anticipated sales orders;
(iii) current ‘pantry loading’ sales levels in Quebec reverse to pre-pandemic sales levels;
(iv) the Alberta, Ontario or Quebec government eliminate or scale-back delivery methods for retail sales as part of a stronger ‘shelter in place program’;
(v) the Company’s Leamington or Densborn facilities face greater than current levels of employee absences reasons related to COVID-19; and/or
(vi) the Company’s supply chain partners materially increase their prices or experience unanticipated material disruptions to their business or chose to implement policy changes affecting Aphria in light of ‘shelter in place programs’.
Without clarity on the Company’s expected revenue levels, it is improbable to accurately forecast EBITDA levels on these revised revenue levels.
For all of the factors surrounding the growing uncertainty and the near-term financial impact of the pandemic, the Company is suspending its previously announced guidance for revenue, of $575 million to $625 million, and adjusted EBITDA, of $35 million to $42 million, for fiscal 2020.
The Company intends to re-instate its annual guidance once the pandemic stabilizes, which may not be until a point in the Company’s Fiscal 2021 year.