Canada’s Aurora Posts Declining Revenue Amid Ongoing Restrictions
May 18, 2021Canadian cannabis producer Aurora saw revenues fall 17% sequentially for the three months ended March 31, highlighting continued softness in the country’s recreational market amid pandemic restrictions. Adjusted net revenue for the period, Aurora’s third quarter of fiscal 2021, dropped to C$55.1 million ($46m), a decline not only from the previous quarter but from the same period last year as well.
The company’s sales mix is shifting significantly. Medical cannabis net revenue reached C$36.4 million ($30m) in the quarter, representing a slight downturn from the previous quarter but up 17% year-over-year. Adult-use sales sales fell precipitously to only C$18 million ($15m), down 37% from the previous three months and 53% from last year. One notable cause of underlying losses in adult-use revenue is the falling price of cannabis—the average net selling price of a gram of flower has fallen from C$4.64 a year ago to C$3.59 at present. Aurora actually sold more gram equivalents in its most recent quarter but the sharply lowered value erased those gains in terms of revenue.
“Consistent with many of our peers, the quarter presented challenges in the Canadian adult-use segment,” said CEO Miguel Martin. “This reinforces the importance of Aurora’s broadly diversified business model that balances domestic medical, international medical, and adult-use platforms. We delivered the strongest performance in domestic medical and the best results in international medical cannabis of any Canadian LP during the period. This is critical, because we expect being No.-1 by revenue in Canada’s medical market should translate into global adult-use success in the future as medical regimes evolve to adult-use markets.”
It was a mixed bag for Aurora in terms of losses. The company logged a net loss of C$164.7 million ($137m), worse than this time last year but a significant improvement over Q2’s loss of C$292.8 million ($243m) in the three months beforehand. With an adjusted EBITDA loss of only C$24 million ($20m), the company continues to look healthier on an underlying basis. And it says approximately C$70 million ($58m) of annualized cost efficiencies should be realized in the next year to year and a half.—Danny Sullivan
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