Full Press Release Details
Aurora Cannabis Announces Financial Results
for the First Quarter of Fiscal 2019
to $29.7 Million - Pro-Forma Revenues up 333% to $35.8 Million
Strong Adult Consumer
Roll-out and Continued Production Scale Up
EDMONTON, Nov. 12, 2018 /CNW/ - Aurora Cannabis
Inc. ("Aurora" or the "Company") (TSX | NYSE: ACB) (Frankfurt: 21P; WKN: A1C4WM), announced today its financial
and operational results for the first quarter ended September 30, 2018.
Q1 2019 Financial and Operational Highlights
| In thousands ('000s) unless otherwise noted | Q1 2019 | Q4 2018 | % Change | Q1 2018 | % Change |
| Financial Results | |||||
| Revenue | $ 29,674 | $ 19,147 | 55% | $ 8,249 | 260% |
| Cannabis revenue (1) | $ 24,596 | $ 14,880 | 65% | $ 7,315 | 236% |
| Gross margin on cannabis sales (2) | 70% | 74% | (4%) | 58% | 12% |
| General and administration expense | $ 35,943 | $ 22,557 | 59% | $ 2,993 | 1,101% |
| Sales and marketing expense | $ 29,376 | $ 14,761 | 99% | $ 3,668 | 701% |
| Earnings | $ 104,181 | $ 79,268 | 31% | $ 3,560 | 2,826% |
| Earnings attributable to common shares | $ 105,462 | $ 79,870 | 32% | $ 3,560 | 2,862% |
| Operational Results | |||||
| Cash cost of sales per gram of dried cannabis sold (3) | $ 1.90 | $ 1.87 | 2% | $ 2.16 | (12%) |
| Cash cost to produce per gram of dried cannabis sold (3) | $ 1.45 | $ 1.70 | (15%) | $ 1.87 | (22%) |
| Active registered patients | 67,484 | 43,308 | 56% | 19,280 | 250% |
| Average net selling price of dried cannabis (4) | $ 8.39 | $ 8.02 | 5% | $ 7.32 | 15% |
| Average net selling price of cannabis extracts (4) | $ 12.12 | $ 13.52 | (10%) | $ 16.41 | (26%) |
| Kilograms produced | 4,996 | 2,212 | 126% | 1,010 | 395% |
| Kilograms sold | 2,676 | 1,617 | 65% | 890 | 201% |
| (1) | Cannabis revenue for Q1 2019 was comprised of revenues from both medical and adult-use markets (adult use revenues of $0.6 million reflect only Aurora's initial shipments received by provinces in final days of September 2018 and took place prior to Aurora Sky receiving its sales license on October 17, 2018). Q4 2018 and Q1 2018 cannabis revenues were comprised solely of revenues from medical cannabis |
| (2) | Represents the gross margin on cannabis sales before fair value adjustments |
| (3) | Represents the cash cost of sales and cost to produce per gram sold of dried cannabis produced by Aurora |
| (4) | Represents the average net selling price per gram of dried cannabis or per gram of dried cannabis equivalent. |
Commencement of Sales to Canadian Adult
On October 17, 2018, sales of cannabis for adult consumer use in Canada, legalized through Bill C45, commenced. Aurora recorded
a strong performance, ranking top or among the top selling products and brands in many of the provinces the Company committed to
supplying, for the first two weeks to October 31, 2018.
Provincial Highlights (for the period up
to October 31, 2018):
ON (Source: Ontario Cannabis Store (OCS) website)
Aurora brands accounted approximately 30% of the total
market supplied through the OCS
San Rafael was the top selling brand in ON with Aurora
supplying two of the three top selling products
BC (Source BC government website - data current
Top 4 best-selling dried flower products in BC
2 of top 5 and 3 of top 8 best-selling oil and capsule
PEI (Source: PEI government sales report - data
current as of Nov 2)
Aurora and MedReleaf are 2 of the 6 top best-selling
2nd largest for overall revenue
More than 450 unique SKUs launched across Canada
Revenue of $29,674, up 260% compared to the same period
Pro-forma Q1 2019 revenue of $35,752, including MedReleaf
(consolidated as of July 25, 2018), Anandia (consolidated as of August 8, 2018) and Agropro (consolidated as of September 10, 2018)
Gross margin on cannabis of 70%, up 12% points compared
to the first quarter of 2018, and down slightly by 4% points compared to Q4 2018. The increase versus Q1 2018 was primarily due
to a higher average selling price per gram of dried cannabis, coupled with a higher proportion of cannabis oil sales in the Company's
sales mix ratio. The slight decrease from Q4 2018 was due to higher average packaging costs related to the inclusion of MedReleaf's
relatively higher packaging costs and an overall increase in packaging costs due to the stringent regulatory requirements of the
Cash cost of sales decreased by 12.0% compared to Q1
2018 and increased slightly by 1.6% compared to Q4 2018. Cash cost to produce per gram of dried cannabis sold decreased 22.5% compared
to Q1 2018 and fell by 14.7% compared to Q4 2018. This decrease was primarily due to more efficient production processes rapidly
implemented post-acquisition at the Company's subsidiary CanniMed.
Active registered medical patients of 67,484, up 250%
compared to the first quarter of 2018.
Kilograms produced and kilograms sold of 4,996 and 2,676,
up 395% and 201%, respectively, as compared to the same period in 2018.
8 facilities with production licenses, 6 facilities with
sales licenses, including Aurora Sky.
Introduced Aurora Cloud, making Aurora the first and,
to the company's knowledge, only LP supplying a vape-ready CBD oil cartridge to the market.
Management Commentary
"We continue to successfully execute our
differentiated and diversified strategy committed towards domestic and international expansion in the medical cannabis market,
adult consumer use sales, production scale-up, innovation, plant and medical research, and product development," said Terry
Booth, CEO of Aurora. "The commencement of adult consumer use sales in Canada has been very successful for Aurora, with strong
performance across all product categories and brands. Our initial roll-out success demonstrates how our high-quality Aurora Standard
products and well-positioned brands have resonated strongly with the consumer market and our preparedness for the logistical challenges
in effectively bringing our products to market. Given the strong unmet consumer demand evident across Canada, we are confident
that our rapidly increasing production capacity will result in continued acceleration of revenue growth."
Mr. Booth added, "We also continue to
perform well in our international medical business. With the acquisition of ICC Labs, which we expect to close in the coming weeks,
we are establishing leadership in Latin America. In addition to ongoing international growth and expansion led by our team at Aurora
Europe, we were also the first non-government organization to export medical cannabis to Poland, a medical market with a population
roughly equal to Canada. Across our international activities, we have established significant early mover advantage and market
leadership. With the scale-up of our domestic and international production facilities, we anticipate increased availability
of product to service these developing markets which will drive further global growth for the Company."
Glen Ibbott, CFO, added, "In Q1 2019,
we continued to propel Aurora's growth making critical investments in our corporate, sales, and marketing talent and capabilities.
A significant portion of our Q1 2019 marketing spend was in preparation for the adult consumer use market with numerous branding
and market awareness initiatives. With more restrictive marketing regulations in effect as of October 17th, we will see a significant
reduction in average marketing spend over the remainder of the fiscal year. We also anticipate a reduction in other one-off
expenditures, such as the integration costs related to the MedReleaf, CanniMed, and Anandia acquisitions."
Mr. Booth concluded, "As a science, medical
and patient focused organization, we are committed to continue serving our patients with the products they require. As we built
up inventory levels in anticipation of the adult consumer use market, we prioritized product availability for our over 67,000 existing
patients. With production ramping up, we anticipate once again pro-actively driving additional growth in this core medical segment,
both domestically and internationally."
Q1 2019 and Subsequent Operational Highlights
Facilities and Production update
During and subsequent to the quarter, the Company
made significant progress towards increasing its production capacity, including receipt of various sales and production licenses.
Based on grow rooms in production, the Company currently is running at an annualized run rate of 70,000 kg. Management anticipates
that around calendar year end 2018 into the beginning of calendar 2019, Aurora will have a production run rate in excess of 150,000
kg per annum based on grow rooms in production, with subsequent scale up to over 500,000 kg per annum (excluding additional capacity
through the acquisition of ICC Labs).
On October 17, 2018, the Company received its
Health Canada sales license for Aurora Sky, allowing Aurora to increase product availability across Canada. Facility construction
is now materially complete, including exterior structure, landscaping, commissioning, and harvest and waste rooms.
Aurora continues to populate additional bays
at the facility, with all 17 rooms anticipated to be ready to receive plants within the coming month, and the facility fully planted
around calendar year end, ramping up to full capacity. The recently planted rooms were populated using the successfully commissioned
automation systems, which function as anticipated, resulting in substantially increased facility efficiencies as compared to traditional
greenhouses or indoor grow facilities.
Aurora Sky is a technologically highly sophisticated
facility, built to deliver exceptional operational efficiencies, including energy, water and nutrient use. In addition to harnessing
the power of the sun through the use of highly specialized glass with strong light diffusing characteristics, the Company captures
the excess heat generated in the facility during the day, storing it in the successfully commissioned heat sink to be reused when
additional heat energy is required, usually during night time hours. The facility is also set up to harness the higher ambient
temperatures during the warmer months to supply additional free heat, while the colder months provide free additional cooling capacity.
The electricity consumed by the facility is