Full Press Release Details
Aurora Cannabis Announces Financial Results
for the Third Quarter of Fiscal 2019
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%
Growth 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.
Production 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 quarter.
stabilized with a modest increase of 1%, reflecting Aurora's ongoing commitment to disciplined cost management.
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
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 $102 million non-cash fair value
loss in the Q3 2019 profit and loss statement.
Management Commentary
"I'm exceptionally proud of our company
and team as Aurora continues to deliver on our domestic and international growth strategy. We achieved solid revenue growth and
strong operating results in a quarter proven challenging across the industry. We are laser focused on building a long-term
sustainable business," said Terry Booth, CEO. "During the quarter, we formally welcomed Nelson Peltz a key strategic
advisor. He has been incredibly engaged, collaborative, and strategically focused on assisting our pursuit of growth in global
markets and with mature companies in adjacent industries."
Glen Ibbott, CFO, added, "Aurora is an
extremely active and diversified company, leading the industry in cannabis research, product development, cultivation, global scale,
and revenue growth. With a solid Q3 on all fronts, it's time to move the yardsticks for the industry again. The company
we have built with purpose through both organic growth and targeted acquisitions has provided a unique opportunity: continue to
lead the industry in revenue growth while also progressing to positive operating earnings in the near term."
Q3 2019 Key Financial and Operational Metrics
| ($ thousands, unless otherwise noted) | Q3 2019 | Q2 2019 | % Change | Q3 2018 | % Change |
| Financial Results | |||||
| Gross revenue | $75,238 | $62,000 | 21% | $16,100 | 367% |
| Net revenue (1) | $65,145 | $54,178 | 20% | $16,100 | 305% |
| Cannabis net revenue (1) | $58,652 | $47,577 | 23% | $10,810 | 443% |
| Medical cannabis net revenue | $29,075 | $25,994 | 12% | $10,810 | 169% |
| Consumer cannabis net revenue | $29,577 | $21,583 | 37% | NA | NA |
| Gross margin on cannabis net revenue (1) | 55% | 54% | 1% | 59% | (4)% |
| Selling, general and administration expense | $67,104 | $66,362 | 1% | $15,727 | (327)% |
| Adjusted EBITDA (2) | ($36,617) | ($45,524) | (20)% | ($12,904) | 184% |
| (Loss) earnings attributable to common shareholders | ($158,354) | ($237,752) | (33)% | ($19,215) | 724% |
| Balance Sheet | |||||
| Working capital | $469,729 | $274,629 | 71% | $338,476 | 39% |
| Cannabis inventory and biological assets (2) | $118,023 | $79,924 | 48% | $28,478 | 314% |
| Total assets | $5,549,780 | $4,875,884 | 14% | $1,671,400 | 232% |
| Operational Results - Cannabis | |||||
| Cash cost to produce per gram of dried sold (2) | $1.42 | $1.92 | (26)% | $1.53 | (7)% |
| Active registered patients | 77,136 | 73,579 | 5% | 45,776 | 69% |
| Average net selling price per gram (2) | $6.40 | $6.80 | (6)% | $7.99 | (20)% |
| Kilograms produced | 15,590 | 7,822 | 99% | 1,206 | 1,193% |
| Kilograms sold | 9,160 | 6,999 | 31% | 1,353 | 577% |
| (1) | Net 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. | ||||
| (2) | 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
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
Q3 2019 Facility and Production Update
Aurora defines production rate as the capacity
of all planted rooms that have been approved by the regulator for sales, using anticipated annualized harvests at maturity
based on a historical yield per plant. These targeted yields have been met or exceeded at all of Aurora's current operating facilities.
To view a video overview of Aurora's production facilities, click here: https://youtu.be/irTfAXbFS38.
Construction at Aurora
Sky is complete, and all grow rooms have been licensed by Health Canada. Fully planted, Aurora Sky is operating at its full design
capacity of over 100,000 kg per annum.
All rooms at Bradford
are licensed by Health Canada and the facility has been fully planted. The facility has received no major observations during its
audit to obtain EU GMP certification. Obtaining this certificate will substantially increase the Company's capacity to ship product
to the European market.
The first saleable harvest
at Aurora Nordic 1 is expected by the end of fiscal Q4 2019, with product sales anticipated in December 2019, or as soon as regulatory
approvals are provided. Initial harvests for testing and licensing purposes have been completed successfully.
Construction of Aurora Sun is progressing well, with the
facility anticipated to be ready for planting by mid calendar 2020. Aurora Sun will measure 1.62 million square feet, reflecting
a 33% increase from its originally planned size.
Erection of the steel structure is well underway and anticipated
for completion in late June 2019.
Construction of the glass roof has commenced and is anticipated