Tuesday , 22 October 2019

Cannabis Central: Aurora Cannabis Q4 Results Show 52% Increase In Revenue, 68% Improvement In EBITDA

Aurora Cannabis Inc. (NYSE: ACB; TSX: ACB) yesterday announced its financial and operational results for the fourth quarter and fiscal year ended June 30, 2019.

Q4 Highlights (Unless otherwise stated, comparisons are made between Fiscal Q4 2019 and Q3 2019 results and are in Canadian dollars)

Aurora Cannabis Q4 2019 Key Performance Indicators (CNW Group/Aurora Cannabis Inc.)Source: Aurora Cannabis Q4 2019 Key Performance Indicators (CNW Group/Aurora Cannabis Inc.)
  • Net revenue increased by 52% to $98,9M
  • Net cannabis revenue increased by 61% sequentially to $94.6M primarily driven by additional production capacity and supply available for sale
    • Consumer cannabis revenues increased by 52% to $44.9M and contributed 45% to total consolidated net revenue.
    • Canadian medical cannabis net revenues increased by 9% to $25.2M
    • Wholesale revenues increased by 869% to $20.1M
  • Average net selling price of cannabis decreased by 16.9% to $1.08 per gram
    • primarily attributable to the increase in sale volumes to consumer and bulk wholesale markets which yield lower average net selling prices as compared to medical markets.
  • Gross margin on cannabis net revenue increased to 58% from 55% driven by
    • the continued decline in cash cost to produce per gram and higher gross margins achieved on bulk sales.
  • Cash cost to produce per gram sold declined 20% sequentially to $1.14 per gram in Q4 2019.
  • Production volume increased 86% sequentially to 29,034 kgs.
  • Extraction capacity increased by 29% to 26,400kgs.
    • Subsequent to the quarter-end, Aurora’s annual extraction capacity increased a further 73% to 45,600 kgs.
  • Adjusted EBITDA loss improved by 68% to $11.7M from $36.6 million.
  • SG&A increased by 9% to $72.9 million
    • primarily driven by an increase in fulfillment and shipping costs related to the growth in consumer cannabis sales and
    • continued investment in sales initiatives, distribution network, and partnerships to conduct research, develop products, and drive brand awareness.
  • Aurora’s medical patient base increased by 10% to 84,729 sequentially.
    • As at the date of this release, Aurora has approximately 89,700 active registered patients, a further increase of 6%.

Subsequent Events

  • Closed an amended and up-sized $360 million secured credit facility which includes an accordion feature that enables Aurora to up-size the facility by approximately $40 million,
  • Sold its remaining 28,833,334 shares of The Green Organic Dutchman Holdings Ltd (TSX: TGOD), at a price of $3.00 per share for aggregate gross proceeds of $86.5 million, representing an approximate 50% internal rate of return for the Company.

Outlook

  • Given the very early stage of development of the consumer market in Canada and international medical markets, management anticipates that quarter to quarter sales volumes and revenues may be volatile. The Company, however, expects adjusted EBITDA to continue to improve due to expected revenue growth, improvements in gross margin and prudent SG&A growth.
  • The passing of the U.S. Farm Act presents new opportunities and, as such, Aurora is committed to establishing a substantial operating footprint in the U.S.

About Aurora Cannabis

Aurora Cannabis, headquartered in Edmonton, Alberta, Canada, is one of the world’s largest vertically integrated and horizontally diversified cannabis companies with sales and operations in 25 countries across 5 continents which to date includes 17 wholly-owned subsidiary companies.

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