Nanaimo-based Tilray reports US$33.6M profit in Q4 as it merged with cannabis rival Aphria
Tilray Inc.'s chief executive blamed COVID-19 lockdowns for more than $100 million in revenue losses Wednesday, but hopes a recent merger will help it rebuild from the pandemic.
Irwin Simon, who took the helm of Tilray after it merged with Aphria Inc. in May, told analysts on a conference call that public health measures forced many cannabis stores to temporarily close and sent customers searching for product online, weighing on the company's results for the quarter ended May 31.
“Until just recently, in mid-June, there were over 800 stores in Ontario alone that had never opened their doors to customers because of COVID or could only do curbside delivery,” he said.
“This has now begun to change and many stores have since opened...although that of course, did not help our May ending fiscal quarter sales.”
The pandemic came as Tilray and the cannabis industry are still trying to educate customers about their constantly expanding product lines and pushed Tilray to use social media and e-commerce to reach and entice consumers, said Simon.
Despite the challenges, the company managed to report a US$33.6 million profit in its fourth fiscal quarter, up from a net loss of US$84.3 million during the same time last year.
Tilray's basic and diluted earnings per share for the quarter amounted to 18 cents, up from a loss of 39 cents per share in the year prior.
Analysts had expected Tilray, which reports its results in U.S. dollars, to record a loss of 10 cents per share, according to financial data firm Refinitiv.
Its net revenue for the quarter was US$142.2 million, up from US$113.5 million in the fourth quarter of 2020.
The results pushed Tilray's shares up by $3.55 or more than 22 per cent to $19.58 in mid-morning trading.
Simon said Wednesday that Tilray's future is rosy.
He pointed out that the Aphria merger had already generated US$35 million in synergies, bringing it closer to its US$80 million target.
He also predicted the company would see $4 billion in sales by 2024, in part because he has high hopes that the U.S. will federally legalize cannabis soon.
“Between CBD and THC, (the U.S.) is probably close to a $50-billion market and it's the biggest opportunity for us,” he said.
CBD is cannabidiol, a compound found in cannabis and hemp that doesn't produce a high but is believed to relax consumers, and THC is tetrahydrocannabinol, the main psychoactive component in cannabis.
Tilray, said Simon, intends to expand into the U.S. by looking for opportunities with multi-state operators, cannabis companies doing business in several states. He wants to integrate with them, merge or acquire some of them once legalization happens.
He also plans to focus on Tilray's Sweetwater Brewing Co. and Manitoba Harvest businesses in the U.S. by looking for consumer packaged goods brands in the alcohol and food space to work with to create products that could be infused with cannabis.
To further Tilray's U.S. ambitions, shareholders have been asked to meet Thursday to vote on a proposal centred on using more shares for acquisitions.
The proposal recently received the support of the Glass Lewis and ISS proxy advisory firms.
This report by The Canadian Press was first published July 28, 2021.
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