2QTR20 Costs Many like to discuss revenue instead of costs. I guess its due to the fact that, as a growth company, revenues take precedence. But, this past qtr's great results were mostly due to cost control. Lets face it; costs can be controlled a lot more than revenue streams can. The next qtr's costs should be significantly better than this qtr.
From yesterdays transcript:
Production costs reduction:
-CAD 0.20/gram cost from Aphria One floor space being used to produce plantings for AD
CAPEX CAD 100M costs could be reduced by:
- CAD 35M from final earn out payment on CC Pharma acquisition
- CAD 5M one time payment on long term debt
- CAD 15M working capital supporting increased production capacity
- Expected CAD 5M reduction in working CAPEX
Production cost increase from:
- CAD 2M (1.5M was actual estimate) costs from Broken Coast fire.
So it looks like the reduction in cost per gram will more than offset the costs from the BC fire. But, more importantly, we could see a CAD 60M reduction in CAPEX costs bringing next qtr's CAPEX to CAD 40M. Merton quoted an expected CAPEX of CAD 20-25M but I think there will be added CAPEX to getting AD up and running.
DonB