Aurora Cannabis Q2 2020 Results Show Declines Across The Board

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Aurora Cannabis Inc. (NYSE/TSX: ACB) announced today its financial and operational results for the second quarter of fiscal 2020 ended December 31, 2019.

Key Commentary 

(Unless otherwise stated, comparisons are made between Fiscal Q2 2020 and Q1 2020 results and are in Canadian dollars. Go here to convert into USD.)

• Cannabis net revenue: declined 25.6%
• Gross margin %: declined 14% to 44%
• Average net selling price of cannabis: declined 2.5% to $5.54/g
  • Canadian medical cannabis net revenue: sequentially flat
    • Gross margin %: declined 9% to 54%
    • Ave. Net Selling Price: declined to $7.99 from $8.00
  • International medical net revenue: declined 62.7% due to a short-term permit issue in Germany which has since been resolved
  • Consumer cannabis net revenue: declined 23.7%
    • Gross margin %: declined 21% to 32%
    • Ave. Net Selling Price: declined 9.8% to $4.76
  • Wholesale bulk cannabis net revenue: declined 76.7% due to overall volume declines and the wholesale of lower potency (priced) product.
    • Gross margin %: declined 13% to 45%
    • Ave. Net Selling Price: declined 45% to $1.90
• Selling, General & Administration Expenses: increased 23.1%primarily due to:
  • an increase in the number of employees and annual merit increases,
  • investments in educational marketing campaigns related to the launch of Cannabis 2.0 products,
  • and marketing initiatives related to the launch of the Aurora Drift brand.
• Adjusted EBITDA: declined 102.0% to a loss of $80.2 million primarily due to:
  • the quarter over quarter decrease in revenue,
  • an increase in production costs relating to the ramp up for the legalization of Cannabis 2.0,
  • and the increase in SG&A expenses.

Operational Results

• Kilograms Produced: declined 25.9%
• Kilograms Sold: declined 23.8%
• Cash cost to produce per gram sold: increased 3.5% to $0.88 per gram
• Medical patient base: declined 0.89% to 90,307

Outlook 

Aurora reiterates its outlook for Q3 that cannabis revenue will be impacted by industry headwinds, and as such will likely show modest to no growth relative to fiscal Q2's cannabis revenue.