Aurora Cannabis Q2 revenues surge

Marco Green
February 12, 2019

"Our brands continue to resonate extremely well in the consumer market, our patient numbers continue to increase steadily, and we have maintained our market leadership in Germany and other key worldwide markets", said Terry Booth, Aurora's chief executive officer, in a statement.

Net revenues for the three months ended December 31 increased from $11.7 million in the second quarter of 2017. The company sold $21.6 million of legal recreational cannabis in the quarter and accounted for approximately 20 per cent of all consumer sales across the country.

Licensed producers, meanwhile, are pointing fingers at the pace of Health Canada's licensing process, and supply chain bottlenecks not uncommon to a nascent industry.

"We are positioned to capture a larger part of medical market in Canada and overseas", chief corporate officer Cam Battley said on the call.

It said the company's Edmonton facility will soon reach full production capacity and a recent harvest completed at the facility exceeded targeted yields. "I think the best way to look at the company now, is we will not have any logistical constraints going forward", Booth said.

"However, this is only the beginning, and we anticipate strong continued growth as more products come available to the market", he told analysts.

The Edmonton-based company's quarterly financial results released Monday evening shed light on the pressure cannabis producers face as they seek to increase production and adjust to rising costs associated with new regulations.

During its second quarter, Aurora said it increased cannabis production by 57 per cent to 7,822 kilograms and raised the amount it sold by 162 per cent to 6,999 kg, as it "significantly" scaled up its cultivation operations.

Aurora's average net selling price for dried cannabis was $6.23 per gram and $10 per gram for cannabis extracts.

The licensed producer also said that its priority in terms of product allocation, was to ensure its Canadian and global medical markets were fully supplied, before focusing on the domestic recreational market.

"We are going to emphasize the product forms where we can generate the highest margins".

Aurora Cannabis Inc. lost $237.7 million in the second quarter of its fiscal year even though net revenues surged to $54.2 million as sales of cannabis increased five-fold.

"Aurora disagrees with this practice, and we're not collecting tax from our medical patients but rather are absorbing the cost despite the slight negative effects on our revenues", said Battley.

The net loss was primarily attributed to non-cash expenses and mark-to-market adjustments of around $190 million on Aurora's derivative investments. Hours before its earnings were reported, the company announced it had completed the first commercial export of cannabis oil to the United Kingdom for medical use, under a new legal framework that took effect November 1.

Still, the company's gains are below those of rivals Canopy Growth Corp.

Other reports by Click Lancashire

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