E Aurora In Freefall As A Result Of Ugly Q3 Financials

Aurora Cannabis Inc. (ACB), a constituent in the munKNEE Canadian LP Pot Stock Index, announced its Q3 financial results after the markets closed on Thursday for the period ended March 31, 2021. The highlights are as follows:

Q3 Financial Highlights 

(All results are presented in Canadian dollars - go here to convert into USD - and compared to the previous quarter.)

  • Total Net Revenue: decreased 18% to $55.2M
    • Adj. Gross Margin: increased to 44% from 42% due to:
      • a significant shift in revenue mix towards our medical markets which command much higher average net selling prices, partially offset by
      • the purposeful reduction in production levels at Sky resulting in charges related to under-utilization of capacity.
    • Consumer Cannabis Net Revenue: decreased 37% to $18.0M due primarily to:
      • Covid-19 related challenges across Canada in both provincial distributors and consumer access to in-store retail shopping
        • Adj. Gross Margin: decreased to 21% from 27% primarily driven by:
          • a $1.8 million increase in cost of sales due to under-utilized capacity as a result of the scaling back production at Aurora Sky (expected to partially reverse in future quarters), and
          • a decrease in the average net selling price per gram of consumer cannabis as a result of price compression.
    • Medical Cannabis Net Revenue: decreased 6% to $36.4M
        • Adj. Gross Margin: increased to 59% from 56% despite:
          • the increase in the cost of sales from the under-utilized capacity at Aurora Sky and
          • the continued ramp-up of the Aurora Nordic facility in Europe.
  • SG&A/R&D: increased 1.6% to $45.1M
  • Adj. EBITDA: declined 43% to $(24.0)M
  • Cash-on-Hand: increased 21% to $525M
    • announced that it will file to raise another $300 million in U.S. dollars through an equity offering
  • Cash Expenditures: reduced by 2%
    • Cash used in operations and for capital expenditures are crucial metrics in Aurora's drive toward generating sustainable positive free cash flow
      • Cash Used in Operations: increased 12.3%
      • Capital Expenditures: increased 38.5%
      • Working Capital: decreased 17.8%
      • Debt/Interest Payments: decreased 9.3%
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