Aurora Cannabis Inc. has announced its financial and operational results for its fiscal second quarter ended December 31st, 2018.
Net revenues of C$54.2 million were up 363% compared to the same period in 2018.
This was driven by Aurora’s strong performance in the launch of the Canadian consumer market, with quarterly sales of C$21.6 million, and the company’s continued strength in the Canadian and international medical markets with sales of C$26.0 million, up 8% in revenue and 23% in volume sold.
Average selling prices were impacted by the introduction of excise taxes across all Canadian sales channels on October 17, 2018, as well as lower wholesale pricing realized in the Canadian consumer market.
Going forward, Aurora intends to continue prioritizing medical patients in Canada and globally where margins continue to exceed those achieved on the wholesale consumer market.
Q2 2019 kilograms produced and kilograms sold of 7,822 and 6,999 were up 57% and 162%, respectively, driven by continued and significant scale-up of Aurora’s cultivation operations and strong demand across all the Company’s markets.
Gross margin on cannabis sales of 54% was temporarily down from 70% in the prior quarter.
The decrease was primarily due to a lower average selling price per gram of dried cannabis, the impact of excise taxes on medical cannabis net revenues, and a temporarily lower proportion of cannabis oil sales in the Company’s sales mix ratio. Also impacting gross margin were increased packaging requirements under the Cannabis Act and one-time ramp up and optimization costs as our Sky facility was brought up to full production.
In January 2019, Aurora completed a US$345 million convertible note offering, with the proceeds earmarked predominantly to drive the Company’s continued high pace of growth in Canada and internationally.
“Aurora continues to execute strongly across all of its market segments, as demonstrated by the 83% revenue growth over last quarter and the significant increase in confirmed production results,” said Terry Booth, CEO of Aurora.
“Our brands continue to resonate extremely well in the consumer market, our patient numbers continue to increase steadily, and we have maintained our market leadership in Germany and other key international markets. We are experiencing exceptional demand for our Canadian medical and consumer products, as well as sustained strong demand internationally. With our Aurora Sky and MedReleaf Bradford facilities ramping up production as anticipated and our other licensed facilities operating at full capacity, we are reiterating our earlier guidance of achieving sustained EBITDA positive results from the second calendar quarter of this year (our fiscal Q4).”
Glen Ibbott, CFO of Aurora added, “We are also very pleased with our recent placement of US$345 million in convertible notes. These convertible notes were subscribed by high-quality US, Canadian, and international institutions and offer Aurora the flexibility and optionality to settle the entire principal amount of the notes in the future for cash, shares, or any combination thereof. This funding sufficiently supports the global opportunity for us to continue our commitment to growth in the legal, regulated medical and consumer cannabis systems across the globe. This is a unique time and position as we maintain a high cadence of increasing product supply and international market expansion.”
Mr. Booth concluded, “With our strong performance in the Canadian medical and consumer markets, our early mover advantage in a growing list of important international markets, together with our leadership in high-quality, CBD-rich hemp production, Aurora is strategically positioned across the entire cannabis industry value chain to further extend our rapid growth.”Cannabis Business Worldwide