A significant jump in plant-propagation sales and medical marijuana exports helped Canadian licensed producer Aurora Cannabis narrow its loss in the first quarter of fiscal year 2024 to 28.3 million Canadian dollars ($20 million).
That’s a significant improvement over the previous year’s quarter, when the Edmonton, Alberta-based company reported a CA$618.8 million loss.
Meanwhile, Aurora is winding down Reliva, its American CBD business, citing potential CBD-regulation pathways and timeline announcements by the U.S. Food and Drug Administration.
Aurora’s reported positive adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of CA$2.2 million for the three months ended June 30, 2023, compared with a loss of CA$8.8 million in last year’s quarter.
The company, whose fiscal year 2023 consisted of only three quarters, also attributed the smaller loss to a decrease of CA$457.5 million in impairment of intangible assets and goodwill, a decrease of CA$78.7 million in property, plant and equipment impairment as well as lower operating expenses.
In an interview with MJBizDaily, Aurora CEO Miguel Martin acknowledged he had to make some hard decisions in the quarter, including closing Reliva.
Martin was CEO of Massachusetts-based Reliva before joining Aurora.
Aurora is also pulling the plug on its agreement with Dutch cannabis producer Growery, a deal the company had announced in 2021.
“One of the things for us is we want to be in markets where the regulatory framework is predictable – even if it’s slow,” Martin said.
“In that market (Netherlands), there was a medical opportunity and a rec opportunity everybody was excited about. Both have totally changed in terms of what the opportunity is.
“So when we look at where to spend our finite dollars, that was not one of them.”
Martin noted that “the recreational opportunity went from 500 coffee shops throughout the country and legalizing the wholesale business, which would have made a lot of sense, to not really being an opportunity at all. It just didn’t make any sense to stay with it.”
Overall net revenue in the quarter jumped 50% year-over-year to CA$75.1 million.
Aurora’s sales in the quarter were bolstered by strong exports.
Total international medical cannabis revenue jumped 40% to CA$16.2 million in the quarter.
Sales were also aided by Aurora’s agricultural propagation unit.
Net revenue from plant propagation contributed CA$19.9 million to the company’s sales and represents the highest quarterly revenue for the Bevo Agtech subsidiary to date.
Aurora acquired Bevo in August 2022.
The Edmonton company attributed Bevo’s strong sales to the seasonality of its business, which delivers up to three-quarters of its revenue in the first half of the calendar year.
Aurora’s medical cannabis net revenue, combined from Canada and overseas, increased 14% from last year to CA$41.2 million in the quarter.
Canadian medical cannabis net revenue for the April-June quarter was CA$25.4 million, up slightly over the same quarter last year.
Aurora attributed some of its growth in Canada to increased sales to insured patient groups.
Revenue generated in the adult-use market inched higher to CA$13.2 million, up slightly over last year’s CA$12.6 million.
Aurora disclosed that its cost savings and revenue growth have put the company on a path to achieving positive free cash flow in calendar year 2024.
Aurora’s shares trade as ACB on the Nasdaq and Toronto Stock Exchange.
Matt Lamers can be reached at matt.lamers@mjbizdaily.com.
