Aurora Cannabis Focuses On Long-Term Value Despite 4Q Loss

Adult-use cannabis sales for the Canadian cannabis producer fell 35% year-over-year to $12.6 million.

Canadian cannabis company Aurora Cannabis (Nasdaq: ACB) (TSX: ACB) reveled in its “long-term value” despite the company stock being at one of its lowest points in the past 12 months after releasing its fourth quarter and fiscal year-end results as of June 30, 2022, on Tuesday.

According to a news release, Aurora saw fourth-quarter net revenue for medical cannabis increase 4% year-over-year to $36.6 million, while adult-use cannabis revenue fell 35% year-over-year to $12.6 million.

Sequentially, sales of adult-use cannabis increased 22% from the third quarter, primarily due to sales from its “profitable acquisition” of Thrive Cannabis. Aurora also completed a majority investment in Bevo Farms during the quarter.

Overall Aurora recorded an EBITDA loss of $12.8 million and a net loss of $618.8 million for the quarter versus and EBITDA loss of $21.8 million and net loss of $134 million a year ago.

At the closing bell Tuesday, Aurora stock was trading at $1.40 per share on the Nasdaq, down from a high of $8.50 last November.

Still, Aurora CEO Miguel Martin projected confidence going forward, based on the company’s slow but steady growth.

“We continue to enhance the long-term value of our differentiated global cannabis business by quickly identifying highly profitable growth opportunities, deploying capital in a disciplined manner and continuing to rationalize our cost structure,” Martin said in the release.

That rationalization includes repurposing the Aurora Sky facility in Edmonton.

The company also increased its cash reserves to $488.8 million of cash at the fiscal year end, including $51 million in restricted cash and no secured term debt.

“We remain the No. 1 Canadian (licensed producer) in global medical cannabis revenues and expect this high-margin, high-growth segment to be a key driver for future profitability. We continue to expect a positive adjusted EBITDA run rate by Dec. 31, 2022,” Martin said.

Martin also pointed to Aurora’s “strengthened balance sheet,” which allowed the company to buy back more than $155 million in convertible debt in the fourth quarter.

Martin further noted that medical marijuana revenues in particular leapt 70% in the past year, and that Aurora is planning to expand its industry footprint across both existing and up-and-coming international markets, such as the United Kingdom, Germany, Poland and Australia.

Also on Monday, Aurora was removed from a Toronto stock index, the S&P/TSX index, according to a release from Dow Jones. Three other companies were also deleted from the index, but no specific reasons for the removals were given, other than that the changes were made “as a result of (a) quarterly review.”

John Schroyer


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