Aurora Cannabis reported a loss of 87 million Canadian dollars ($65 million) for the three months ended March 31, 2023, up slightly from the CA$67.2 million net loss reported in the previous quarter.
However, the Edmonton, Alberta-based company posted positive adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of CA$300,000 for the three months – Aurora’s second straight positive adjusted EBITDA.
The cannabis producer’s net sales amounted to CA$64 million in the third quarter, increasing 4% sequentially from the previous quarter’s CA$61.7 million.
The revenue and adjusted EBITDA figures came in slightly below the consensus among analysts.
Aurora changed its year-end to March 31, so the fiscal year 2023 results comprise only three quarters.
In a conference call with analysts, CEO Miguel Martin said the consecutive positive adjusted EBITDA figures demonstrate that the company’s “business transformation plan” is working.
He said the company’s next financial milestone is generating positive free cash flow, which it aims to achieve before the end of calendar 2024.
Aurora has already saved CA$400 million annually, Martin said, by “rationalizing expenses,” such as closing some facilities, in the past three fiscal years.
The company on Wednesday also announced a plan to achieve an additional CA$40 million in annualized savings.
To that end, Aurora said it is closing its leased facility in Denmark.
“This fiscal year we’re working on taking out a minimum of CA$5 million quarterly from operations, as we eliminate less efficient operations and focus on supplying the globe from our very low cost and high-quality production facilities (in Canada),” Chief Financial Officer Glen Ibbott told analysts.
By category, Aurora’s medical cannabis net revenue fell 4% from the previous quarter to CA$37.9 million.
Martin told analysts that insured patients represent 82% of Aurora’s third-quarter medical cannabis revenue.
“Our industry-leading share remains at about 25%, roughly double that of our closest competitor,” he said during the conference call.
Sales of nonmedical cannabis fell 1% from the previous quarter to CA$14.5 million.
Canada’s recreational market still has challenges, Martin said, citing price compression.
“But we do see spots where you can perform and still make some money – concentrates, pre-rolls and ingestible, which we have had considerable success in,” the CEO said.
“I think we’re a little bit of a ways off where there will be strong economics across all aspects of the rec portfolio, but it’s definitely getting better.
“We see some glimmers of hope with provincial entities such as the (Ontario Cannabis Store) putting in pricing floors. We do see a little bit of rationalizing of pricing, particularly on flower.”
Aurora is among a handful of cannabis producers who have diversified sales outside the industry in recent years.
Plant-propagation revenue in the third quarter represented a significant increase from the second quarter, “as the segment delivers its highest revenue in the last winter and spring months as orders are fulfilled,” Martin said.
Aurora has completed repurposing its 800,000-square-foot Aurora Sky facility in Edmonton for orchid and vegetable propagation.
The company expects to see sales generated from the Sky facility in the final quarter of calendar 2023.
“Once executed, Bevo’s financial contribution could be significant,” Martin said, referencing Aurora’s CA$45 million acquisition of a controlling interest in Bevo last summer.
Langley, British Columbia-based Bevo is a profitable supplier of propagated vegetables and ornamental plants.
“This rapid expansion serves to increase Bevo’s production capability and extends its shipping range to Canada and the United States,” the CEO added.
Plant-propagation revenue rose 62% from the previous quarter to CA$10.7 million in the third and final quarter of Aurora’s 2023 fiscal year.
Aurora shares trade on the Toronto Stock Exchange and Nasdaq.
