Aurora Cannabis Inc. (NASDAQ: ACB) (TSX: ACB) says it will focus on medical sales and is fully shutting down its Aurora Sky Edmonton airport facility to save money.
On Thursday, the company announced its third-quarter financial results ended on March 31 this year and reported a decrease of 17 per cent in net revenue of $50.4 million from $60.6 million in the last quarter. The company says the difference is because of the $8.5 million of net sales generated from its Israel supply agreement in the previous quarter.
Adjusted gross margin before fair value adjustments on medical cannabis net revenue was 64 per cent compared to 63 per cent in the last quarter. The company also saw an adult-use cannabis net revenue decrease to $10.3 million from $14.4 million in the last quarter. The company said the decrease is due mainly because of industry-wide pricing pressures and exacerbated retail store closure in key provinces.
Auroras medical cannabis net revenue was $39.4 million, which is 78 per cent of the company’s consolidated revenue and 92 per cent of adjusted gross profit.
Adjusted gross margin before fair value adjustments on cannabis net revenue was 54 per cent in Q3 2022 versus 53 per cent in the previous quarter. Adjusted Earnings before interest, taxes, and depreciation loss declined to $12.3 million in Q3 versus $9.0 million in the second quarter. The company says the change was primarily driven by lower revenue offset by a restructuring of its operations.
Aurora reported it had $480.6 million of cash by the end of the quarter, including $50.7 million in restricted cash and no secured term debt.
During its financial announcement, the company reported it will shut down the 25 per cent remaining of its Aurora Sky facility located in the Edmonton International Airport to save money.
As a result, Aurora recorded a number of one-time non-cash charges during the quarter including a write own of good will of $741.7 million, asset-specific impairments of $176.1 million, and an inventory provision charge of $63.6 million.
The company also announced that its Valley, Anandia and Whisler Alpha Lake are expected to be closed by the fourth quarter of 2022.
Company stock went up by 5.71 per cent on Friday to $3.33 on the Toronto Securities Exchange.
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Aurora CEO Miguel Martin said the cost savings will enable the company to increase its range of savings under its business transformation plan from $60-$80 million to $150-170 million.
“Our balance sheet also remains among the strongest in the industry, enabling the repurchase of $141.4 million in convertible debt early, while also providing meaningful working capital to support organic growth and pursue strategic M&A, such as our recent acquisition of Thrive Cannabis,” Martin added.
During the third quarter the company said it focused on its global medical cannabis business because it’s “defensive and stable”.
Martin said the company is pleased to have experienced considerable top-line growth in this segment year-over-year.
“And with new international markets poised to open, our track record and ability to navigate complex regulatory environments position us ideally for a significant revenue opportunity globally,”