Production Volumes Double While Per-Unit Production Costs Decline
On Track to Deliver Positive EBITDA Beginning in Fiscal Q4 2019
TSX: ACB | NYSE: ACB
Aurora Cannabis Inc. (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.
- SG&A expenses have 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 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.
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."
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