Aurora Cannabis Inc. announced Thursday that it has completed a transformation plan delivering $340 million in annualized savings since February 2020, but said it still incurred a $67.2 million net loss in its most recent quarter.<\/p>\n
The plan involved an extensive restructuring and several rounds of layoffs and facility closures over the last three years as it contended with shifting COVID-19 measures and grappled with aligning supply and demand.<\/p>\n
The Edmonton company's goal was to reach profitability based on adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) by the end of 2022.<\/p>\n
The company behind brands like Daily Special, Drift, Greybeard and San Rafael achieved that feat with an adjusted EBITDA of $1.4 million in its second quarter ended Dec. 31 compared with a loss of $7.4 million in its first quarter and $7.1 million in the same period a year ago.<\/p>\n
"We are thrilled with where we are, but I would say this is absolutely not the finish line," said Miguel Martin, Aurora's chief executive, on a call with analysts.<\/p>\n
Aurora and others in the sector are still contending with an illicit cannabis market that has a significant hold on consumers and grappling with a mismatch between the industry's once-lofty sales expectations and the volumes that have materialized instead.<\/p>\n
These pressures contributed to their $67.2 million net loss, compared with a net loss of $75.1 million for the same period in the prior year.<\/p>\n
Aurora attributed the smaller loss between the two periods to foreign exchange gains, lower operating expenses and a drop in property, plant and equipment charges.<\/p>\n
However, its net revenues were still under pressure during the period ended Dec. 31. They totalled $61.7 million compared with $60.6 million a year before.<\/p>\n
<\/p>\n
Consumer cannabis net revenue was $14.6 million, a two per cent increase from the second quarter of its last financial year.<\/p>\n
Medical cannabis revenue fell 14 per cent over the same time period to $39.5 million.<\/p>\n
Martin is confident the completed transformation plan will help Aurora navigate the economic pressures of the sector and boost sales in several categories.<\/p>\n
"We completed our plan during a period of volatility and uncertainty around the Canadian recreational market," he said.<\/p>\n
"The good news is it continues to rationalize, which will give us an added opportunity for market share improvement."<\/p>\n
As the company moves forward, he said it will lean on opportunities in Poland, the U.K., the Czech Republic and France — markets at varying stages of cannabis acceptance and where he feels "bullish."<\/p>\n
However, Canada's medical market remains Aurora's star.<\/p>\n
"Canada is a hard market. They are all sort of hard, but the reason (Canadian medical) is so sticky is that we made really significant investments in this," Martin said.<\/p>\n
"We have been in it a long time and we think we are pretty good at it."<\/p>\n
He estimates Aurora has about a 25 per cent share of Canada's medical market with its next closest competitor trailing at nine per cent.<\/p>\n
However, in other markets like Germany, rivals moved even more quickly, so Martin feels it might be a longer process to nab a bigger share of the sales.<\/p>\n
"It's not always that first-mover status matters, but it takes more time."<\/p>\n
This report by The Canadian Press was first published Feb. 9, 2023.<\/p>\n
Companies in this story: (TSX:ACB)<\/p>\n
Note to readers: This is a corrected story. A previous version misstated a company name in paragraph 12.<\/p>\n
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