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Aurora Cannabis Inc. AC ACB, a Canadian leader in the cannabis industry serving both the medical and consumer markets, announced its financial and operational results for the fiscal first quarter that ended September 30, 2022.
As a reminder, Fiscal 2023 will be comprised of three quarters, with the new fiscal year end being March 31, 2023.
First Quarter 2023 Highlights
Medical Cannabis: Medical Cannabis net revenue was $31.6 million, a 14% decrease from the prior quarter and a 23% decrease from the prior year period, delivering 64% of Aurora’s Q1 2023 consolidated net revenue and 86% of Adjusted gross profit before fair value (FV) adjustments, according to the press release.
Adjusted gross margin before FV adjustments on medical cannabis net revenue was 67% compared to 62% sequentially and 64% in the prior year period.
Consumer Cannabis: Consumer cannabis net revenue was $13.7 million, a 9% increase from the prior quarter and a 28% decrease from the prior year period.
“Adjusted gross margin before FV adjustments on consumer cannabis net revenue was 25% for the three months ended September 30, 2022, compared to 26% in the prior quarter and 32% in the comparable prior year period. The decrease of 1% from Q4 2022 and 7% from Q1 2022 were due primarily to higher packaging volumes in Q1 2022, which reduced the average cost of goods sold in that period,” reads the press release.
Selling, general, and administrative costs including R&D $43.8 million in Q1 2023.
Total net revenue for fiscal Q1 2023 was $49.3 million, compared to $50.2 million in the previous quarter. Total cannabis net revenue was $46.0 million, as compared to the prior quarter’s total cannabis net revenue of $50.2 million and $60.1 million in the prior year period.
Adjusted EBITDA loss “decreased to $8.7 million in Q1 2023 versus $11.6 million in Q4 2022 and $11.0 million in the prior year period. The decrease in Adjusted EBITDA loss, as compared to the prior quarter and the same period in the prior year is primarily attributable to reductions in SG&A and improvement in the adjusted gross margin before fair value adjustments.”
Net Loss for the three months ended September 30, 2022, was $51.9 million compared to $618.8 million in the prior quarter and $11.9 million for the same period in the prior year.
Fiscal Q2 2023 Expectations
The Company expects to achieve its goal of reaching Adjusted EBITDA profitability by December 31, 2022.
“Having resolved the negative impact of certain cultivar supply and wholesale distribution disruptions affecting our European medical and Canadian consumer business units respectively in fiscal Q1 2023, the Company expects cannabis revenue for fiscal Q2 2023 to be largely similar to fiscal Q4 2022,” per a company press release.
Aurora has one of the strongest balance sheets in the Canadian Cannabis industry with approximately $393 million of cash, including $58 million in restricted cash as of November 9, 2022, and access to significant capacity under a base shelf prospectus filed on March 30, 2021, including US$156.8 million remaining securities for sale under the 2021 at-the-market (ATM) program.
According to Miguel Martin, CEO of Aurora, “we are quickly approaching our positive Adjusted EBITDA goal and are on track to achieve up to $170 million in annualized cost savings by December 31, 2022, having already realized $140 million through Q1 2023. Our strengthened balance sheet and strong cash position have facilitated early repurchases of convertible debt of approximately US$160 million in 2022. We are well-positioned to enhance the long-term value of our differentiated global cannabis company.”
International medical cannabis net revenues were slightly uneven in Q1 2023, characteristic of rapidly developing markets. However, the long-term growth trajectory “remains solid for our unique, portable, and profitable international medical program,” he said.
“We continue to identify areas of profitability and growth within the Canadian adult recreational segment, even in the face of a challenging environment, and are proud to have introduced a significant number of new products this fall that will benefit both our adult recreational customers and medical patients,” Martin concluded.
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