Aurora Cannabis Inc. ACB ACBa Canadian global company in the cannabis industry serving both the medical and consumer markets; recently reported its financial and operating results for the fourth quarter and fiscal year ended June 30, 2022.
Fourth Quarter 2022 Highlights:
- Net sales of medicinal cannabis were $36.6 millionan increase of 4% over the same period last year, delivering 72.8% of Aurora’s consolidated net sales in the fourth quarter of 20221 and 86.3% of adjusted gross profit before fair value adjustments1.
- That Sales increase of 35.4% driven by growth in the international medical business compared to the prior-year quarter, primarily due to the Company’s increasing presence in key emerging international medical cannabis markets.
- Adjusted gross margin before FV adjustments on net medical cannabis revenue1 was 62% compared to 68% in the prior-year period and 64% sequentially.
- Consumer Cannabis1 net revenue was $12.6 million, compared to the previous quarter’s net income of $10.3 million. The 22.2% increase was primarily due to the addition of Thrive’s net revenue1 from consumer cannabis of $1.4 million for the period May 6, 2022 to June 30, 2022.
- Adjusted gross margin before FV adjustments on net revenue from consumer cannabis was 26% for the three months ended June 30, 2022, compared to 29% in the previous quarter and 31% in the comparable period last year.
Sales, General and Administration (“SG&A”):
- SG&A, including research and development (“R&D”), was $49.3 million in Q4 2022 This includes $6.8 million in restructuring-related charges, $2.3 million in accumulated regulatory fees from prior periods, and $1.1 million in one-time project and litigation costs.
- For the fourth quarter of 2022, total cannabis net revenue1 was $50.2 millioncompared to the prior quarter’s total cannabis net revenue1 of $50.4 million.
- Adjusted gross margin before FV adjustments on cannabis net sales1 was 52% in Q4 2022 up from 57% in the previous quarter and 54% in the fourth quarter of 2021.
- Adjusted EBITDA1 loss increased to $12.9 million in the fourth quarter of 2022 from $11.4 million in the third quarter of 2022, but down from $21.8 million in the same period last year. The increased Adjusted EBITDA1 loss compared to the prior quarter is primarily due to a $3.4 million reduction in Adjusted Gross Margin before FV adjustments1, primarily due to a change in the Company’s channel mix that resulted in lower average net selling prices .
net loss for Q4 2022 it was $618.8 million compared to $134.0 million for the same period last year. “The increase in net loss was primarily due to non-cash impairment charges of $505.1 million recognized in other income (expense) in the current quarter to amortize goodwill, intangible assets and property, plant and equipment,” it said in a press release.
Operating efficiency plan, balance sheet strength and cash usage:
According to earnings reportAurora “has previously identified annualized cash savings of up to $170 million in cash savings through the end of December 2022 as part of this transformational program, roughly evenly split between cost of goods sold (“COGS”) and SG&A.” As of June 30, 2022, the Company had $488.8 million in cash, including $51.0 million in restricted cash, and no secured debt.”
Additionally, Miguel Martin, CEO of Aurora said they “continue to enhance the long-term value of our differentiated global cannabis business by quickly identifying highly profitable growth opportunities, disciplined use of capital and further streamlining our cost structure.”
He further said that the company expects a positive Adjusted EBITDA run rate through December 31, 2022 and “stays on track with our previously announced cost savings targets of up to $170 million in annual savings.”
Finally he added that Aurora’s investments in science are “starting to pay off.” “We launched nine new proprietary strains during the year that offer consumers rotation and variety and drive significant yield increases,” concluded Martin.
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