Overall, Aurora Cannabis continued solid sales growth averaging 20% across all major markets, driven by successful scale-up of the company’s production and continued strength across the Canadian consumer, Canadian medical, and International medical cannabis markets.
While the entire SEDAR filing is 37 pages long, there’s still 10+ key highlights and takeaways from Aurora’s third quarter.
Aurora’s Growth by Market Segment
With the rapid ramp-up of the Canadian adult-use cannabis market, it comes as no surprise that we see slowed growth in the Canadian medical market. Despite these headwinds, Aurora was still able to grow sales in the medical segment, as well as its patient base.
- Aurora’s Canadian consumer cannabis revenues were up 37% when compared to Fiscal Q2 2019.
- Aurora’s Canadian medical marijuana sales were up 8% when compared to Fiscal Q2 2019.
- Last, but not least, Aurora’s international medical cannabis revenues were up 40% when compared to Fiscal Q2 2019.
While the growth of the company’s medical patient base was up by 5% to 77,136 in Q3, as of May 14th, 2019, Aurora actually has 82,745 active registered patients, a further increase of 7%, and continues to register new patients as product availability ramps up.
Aurora’s Production Realizing Economies of Scale
Thanks to efficiencies of scale realized as a result of its massive new facilities and capacity growth, Aurora’s production costs decreased, meaning wider margins for the international marijuana giant.
- Cash cost to produce each gram declined 26% to $1.42 CAD per gram, as the initial impact of Aurora Sky‘s scale and efficiency began to be realized.
- Production volume increased 99% to 15,590 kgs, up 1,200% year-over-year. The increase in production accelerated through the quarter, with the majority of the harvested volume realized in the last half of the quarter.
Is Aurora Facing Margin Pressure?
While cash costs to produce each gram of cannabis fell in the third quarter, so did the average selling price per gram thanks to a few key reasons:
- More sales were wholesale sales, so, therefore, more of Aurora’s revenues were lower margin sales.
- Extraction capacity constraints resulting in extract-based products comprising 18% of net cannabis sales.
- It was the first full quarter impact of excise tax on medical cannabis.
Also, Aurora’s SG&A expenses increased by 1%, which, albeit small, it still eats into the bottom line.
EBITDA on the Horizon?
The biggest takeaway from Aurora’s Q3 announcement was that:
“the company continues to track towards achieving EBITDA positive results beginning in Q4 2019 as operations continue to ramp up.”
Aurora’s adjusted EBITDA loss improved by 20% to $36.6 million CAD, but hopefully we’re a quarter away from greener pastures.
Check Out Aurora Cannabis Inc.’s Full Q3 2019 Financials:Aurora Fiscal Q3 2019 Financials
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