Aurora Cannabis Inc. (NYSE:ACB)
Intraday Stock Chart
Today : Tuesday 14 May 2019
Solid Net Revenue Growth Across All Channels to $65.1 Million
Production Volumes Double While Per-Unit Production Costs Decline
On Track to Deliver Positive EBITDA Beginning in Fiscal Q4 2019
TSX: ACB | NYSE: ACB
EDMONTON, May 14, 2019 /CNW/ - Aurora Cannabis Inc. (the "Company" or "Aurora") (NYSE:ACB) (TSX: ACB), announced today its financial and operational results for the third quarter ended March 31st, 2019.
Third Quarter 2019 Highlights
(Unless otherwise stated, comparisons are made between Fiscal Q3 2019 and Fiscal Q2 2019 results)
- Continued solid revenue growth averaging 20% across
all key markets, driven by successful scale up of the Company's
production and continued strong performance across the Canadian
consumer, and Canadian and International medical cannabis markets:
- Canadian Consumer up 37%
- Canadian Medical up 8%
- International Medical up 40%
of the Company's medical patient base, up by 5% to 77,136. As at the
date of this release, Aurora has 82,745 active registered patients, a
further increase of 7%, and continues to register new patients as
product availability ramps up.
- Cash cost to produce per gram declined 26% to $1.42 per gram, as the initial impact of Aurora Sky's scale and efficiency began to be realized.
volume increased 99% to 15,590 kgs, up 1,200% year-over-year. The
increase in production accelerated through the quarter, with the
majority of the harvested volume realized in the last half of the
- SG&A expenses have stabilized with a modest
increase of 1%, reflecting Aurora's ongoing commitment to disciplined
- Average selling price per gram
decreased marginally due to product mix effects (higher contribution
from wholesale consumer), extraction capacity constraints resulting in
extract-based products comprising 18% of net cannabis sales, and the
first full quarter impact of excise tax on medical cannabis.
- Adjusted EBITDA loss improved by 20% to $36.6 million
as the company continues to track towards achieving EBITDA positive
results beginning in Q4 2019 as operations continue to ramp up.
- In January 2019, Aurora completed a US$345 million Convertible Notes offering, with the proceeds earmarked to continue the Company's pace of growth in Canada
and internationally. IFRS accounting standards require a
mark-to-market adjustment at each period end for the derivative portion
of these notes. Due to the increase in Aurora's stock price since the
issuance of the notes, the Company recorded a $102 million non-cash fair value loss in the Q3 2019 profit and loss statement.
"I'm exceptionally proud of our company and team as Aurora continues
to deliver on our domestic and international growth strategy. We
achieved solid revenue growth and strong operating results in a quarter
proven challenging across the industry. We are laser focused on
building a long-term sustainable business," said Terry Booth, CEO. "During the quarter, we formally welcomed Nelson Peltz
a key strategic advisor. He has been incredibly engaged,
collaborative, and strategically focused on assisting our pursuit of
growth in global markets and with mature companies in adjacent
Glen Ibbott, CFO, added, "Aurora is an
extremely active and diversified company, leading the industry in
cannabis research, product development, cultivation, global scale, and
revenue growth. With a solid Q3 on all fronts, it's time to move the
yardsticks for the industry again. The company we have built with
purpose through both organic growth and targeted acquisitions has
provided a unique opportunity: continue to lead the industry in revenue
growth while also progressing to positive operating earnings in the near
Q3 2019 Key Financial and Operational Metrics
($ thousands, unless otherwise noted)
Net revenue (1)
Cannabis net revenue (1)
Medical cannabis net revenue
Consumer cannabis net revenue
Gross margin on cannabis net revenue (1)
Selling, general and administration expense
Adjusted EBITDA (2)
(Loss) earnings attributable to common shareholders
Cannabis inventory and biological assets (2)
Operational Results – Cannabis
Cash cost to produce per gram of dried sold (2)
Active registered patients
Average net selling price per gram (2)
revenue represents our total gross revenue exclusive of excise taxes
levied by the Canada Revenue Agency ("CRA") on the sale of medical and
recreational cannabis products effective October 17, 2018.
These terms and non-GAAP measures are defined or reconciled in Aurora's Q3 2019 MD&A.
The Aurora Sky and Bradford
facilities are now operating at full capacity. With this, the Company's
annualized production run rate across its operational facilities is in
excess of 150,000 kg per annum, based on planted rooms.
Aurora reiterates its target for Q4 with production available for
sale in excess of 25,000 kg. Management intends to allocate a portion of
this capacity to its inventory for manufacturing new products. Aurora
remains focused on having vapes and certain edibles ready for launch
under new regulations in the Canadian consumer market which are expected
toward the end of the calendar year.
With production ramping up, the Company continues to scale up
manufacturing capacity, with innovation and technologies aimed at
reducing time from harvest to market. The Company anticipates that
increased processing, packaging and delivery efficiencies in Q4 and
beyond will accelerate availability of product.
Supply to Europe and other
international markets is expected to increase as more of Aurora's
production facilities receive EU GMP certification. The Bradford
facility has recently undergone an audit to obtain EU GMP
certification. In Q3, the Company began exports of full spectrum
cannabis extracts in Germany. Management anticipates these sales will contribute to growth given the higher margins in extracts.
Oil extraction capacity has been a constraint during the second and
third fiscal quarters of 2019. Subsequent to quarter's end, Aurora
expanded its internal extraction capacity to almost 7,000 kgs per
quarter currently and will reach almost 16,000 kgs per quarter in fiscal
Q1. As well, the Company's extraction partner Radient Technologies is
scaling up commercial production at its Edmonton
facility. Consequently, Aurora anticipates production of extract-based
products to increase, with the full impact starting to materialize
towards the end of fiscal Q4. This increase in internal and external
extraction capacity will enhance Aurora's ability to produce derivative
products at scale, which management expects will have a positive impact
on both revenues and gross margin.
With Aurora Sky now operating at full capacity, the Company
anticipates continued reduction in production and manufacturing costs
allowing cash costs per gram to continue to trend lower. Management
reiterates its expectation that the average cash cost to produce per
gram at its Sky Class facilities will be below $1.
With disciplined cost management, the Company expects SG&A costs
to grow modestly over the remainder of the fiscal year. Consequently,
management anticipates that with sustained revenue growth and lower cash
costs per gram, Aurora is well positioned to achieve positive EBITDA
beginning in fiscal Q4 2019 (calendar Q2 2019).