Aurora Cannabis Reports 223% Jump In Q4 Revenue, Confirms U.S. Listing Plans

Aurora Cannabis Inc. (ACBFF) released its fourth quarter and fiscal year-end financial results following the market close on Tuesday. For the fiscal year ending 2018, Aurora reported total revenue of C$55 million versus fiscal 2017’s total revenue of C$18 million. The net income for the year was C$69 million versus the previous year’s loss of C$12 million. Aurora also reported a gross profit of C$43 million for the year versus last year’s gross profit of C$16 million.

For the fourth quarter of 2018, the company reported that its revenue increased 223% to C$19.1 million from last year’s C$5.9 million for the same time period. Fourth quarter net income increased to C$79 million, versus a net loss of C$20 million for the previous year. It was 16% better than the previous quarter’s revenue of C$16.1 million. Gross margins improved to 74% from the third quarter’s gross margin of 59%.

The company said that the increase was primarily attributable to the unrealized non-cash gain on derivatives and marketable securities, which was partially offset by increased finance costs, share-based payments, acquisition, and project evaluation costs.

The cash cost to produce a gram of dried cannabis increased sequentially from C$1.53 to C$1.70 in the fourth quarter but fell 11% from the previous year’s fourth quarter cost. The drop was attributed to improved efficiencies from automation and better yield knowledge.

The average price of the product sold was C$9.20 per gram, an increase of 15% versus the third quarter and 23% higher than last year’s fiscal fourth quarter. The increase was attributed to the amount of cannabis oils sold. The total amount of cannabis sold in the quarter including oils were 1,617 kilograms (kg), a 19% increase sequentially and a 114% increase year-over-year.

“Aurora made substantial progress toward our strategic goal of becoming the global scale and margin leader in the cannabis industry, establishing a vertically integrated company with a broadly diversified product offering with a large global footprint,” said Terry Booth, CEO of Aurora. “With coast-to-coast supply arrangements and our strategic investment in Alcanna, we are very well positioned to capitalize on the significant adult consumer use opportunity in Canada. With reported Q4 revenues of $19.1 million, pro-forma Q4 revenues of over $33.1 million, and production capacity scaling up rapidly, we anticipate accelerated revenue growth during fiscal 2019. We have invested heavily in our organizational capabilities, including sales, marketing,
and corporate talent and capacity, to ensure we will continue to drive strong and sustainable long-term growth.”

U.S. Listing

Aurora also confirmed that intends to list its securities on a senior U.S Stock Exchange, although it didn’t specify which exchange. The company said that it would file a Form 40-F Registration Statement with the Securities and Exchange Commission (SEC).  Terry Booth, Aurora’s CEO added: “Listing our shares on a senior U.S. exchange reflects the level of corporate and business maturity and our high-paced execution. This listing provides access to a broader investor audience who gain the opportunity to participate in our continued success.

Company Growth

Aurora Cannabis has grown tremendously over the past year. It has made 11 acquisitions ( one more pending) and its headcount has jumped from 300 at the end of 2017 to roughly 1,400 by the end of 2018. Following the end of the fourth quarter, Aurora went on to complete its acquisition of MedReleaf, entered an LOI (Letter of Intent) to acquire HotHouse Consulting and ICC Labs, Acquired Anandia Laboratories, and Agropro UAB.

During the fourth quarter and following it, Aurora made strategic investments in Evio Beauty Group and CannaRoyalty Corp. The company already has strategic investments in Hempco Food, CTT Pharmaceuticals, Choom Holdings, Capcium Inc. and The Green Organic Dutchman (TGODF).

Looking Ahead

The company said that for fiscal 2019, it is going to focus on expanding its capacity and sales growth in all markets, including its international expansion. The company expects to reach a production run rate of approximately 150,000 kg per year by the calendar year end of 2018. It also expects to scale up to 500,000 kg per year through its Aurora Sun and Aurora Nordic facilities.