Aurora Reports Triple Digit Rise In Revenues, Profits

Canadian-based Aurora Cannabis Inc.  (ACBFF) announced its earnings for the second quarter of fiscal 2018, ended December 31, 2017, with revenues rising 201% to $11.7 million over last year’s $3.8 million and growing 41.8% sequentially.

Here’s How The Revenue Rose

The company attributed the revenue growth to a higher patient count, plus a higher average sales price for dried cannabis in Canada, exports to Germany and the consolidation of three companies. In addition to that, the average price of the product sold increased 40.3% over last year from $5.96 a gram to $8.36, mostly as a result of an increase in sales of cannabis oil in Germany.

Aurora also stated that the total product sold for the period was 1,161,809 grams of dried cannabis and cannabis oils rose 115.9% as compared to 538,045 grams of dried cannabis in the second quarter of 2017, and up 30.5% from 889,965 grams in Q1 2018.

Gross Profits

The company also delivered a whopping 374% increase in gross profits of $6.9 million, before the effect of changes in fair value, over last year for the same time period. Aurora attributed this to “higher business volumes related to a strong increase in registered patient numbers and an increase in the average price per gram of product sold, revenues generated in Germany through the Company`s subsidiary Pedanios, as well as the contribution from the Company`s subsidiaries BCNL, UCL and Hempco.”

Aurora also delivered net income before taxes of $10.0 million versus a net loss before taxes of $4.1 million for the same quarter in the prior year. The improvement was due predominantly to revenue growth and a $22.8 million unrealized gain on derivative related to the company’s strategic investment in Radient Technologies. The company earned $26.1 million in Q2 2018, up $27.8 million from Q2 2017, due mainly from an unrealized gain on derivatives of $22.8 million related to the exercise of warrants held in Radient.

Gross margins also improved from 67.6% to 73.8% on Aurora-produced cannabis. The statement read that gross profit after the effect of changes in fair value was $6.5 million for the three months ended December 31, 2017, as compared to $4.4 million for the three months ended December 31, 2016.

Management Comments

“Exceptional, high-paced execution has delivered another quarter with strong growth, as well as further expansion, vertical integration, and diversification,” said Terry Booth, CEO. “With three production licenses, over 240,000 kg per annum in pro-forma funded capacity, multiple distribution channels, and the pending acquisition of CanniMed, we are well positioned to pursue accelerated growth in the domestic and international medical markets. Finally, our partnership with Liquor Stores N.A. shortens our time to market in creating a large bricks-and-mortar cannabis retail network in preparation for the adult consumer use market.”

Looking Ahead

Aurora and CanniMed Therapeutics announced that the companies had agreed on a revised offer, supported by the CanniMed Board, the Special Committee to the CanniMed Board and key management and locked-up shareholders and that deal is expected to close in March 2018. The combination with CanniMed will add an additional 20,000 patients and 19,000 kg per annum in funded capacity, as well as new drug delivery technologies and high-margin cannabis products.

The company owns facilities with capacities expected to exceed 240,000 kilograms of high-quality cannabis per year. Aurora also has long term supply agreements expected to provide a further 23,000 kilograms of high-quality organic cannabis per year, and is working to close the acquisition of CanniMed which would bring an additional 7,000 kilograms of immediate annual capacity. Total current, fully-funded capacity is expected to exceed 270,000 kilograms annually, including all of Aurora Nordic capacity.

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


2 comments

  • Avatar
    roland stanley

    February 8, 2018 at 8:54 am

    Why is Aurora stock price all over the board and not somewhat
    consistent ? All good news and stock seems to have been very
    volatile lately. Please try to explain.

    Reply

    • Debra Borchardt
      Debra Borchardt

      February 8, 2018 at 12:09 pm

      The cannabis stocks tend to trade lockstep without regards to individual company performance.

      Reply

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