Aurora Cannabis Loses $238M in Q2 as Margins Shrink

Aurora Cannabis Loses $238M in Q2 as Margins Shrink

Aurora reported on January 8 that its second-quarter revenue would come in between $50 million to $55 million, below the $67.4 million analysts expected at the time. In the same period a year ago, the company had earnings per share of $0.02 on revenue of C$11.7 million.

The results provide the first clear look of Canadian consumer demand for recreational cannabis since it was legalized last October, and the ability of Aurora to meet that demand.

What is in Aurora Cannabis' future outlook?

Aurora Cannabis Inc. lost $237.7 million in the second quarter of its fiscal year even though net revenues surged to $54.2 million as sales of cannabis increased five-fold. These newly acquired companies will allow Aurora to increase production, with the company expecting substantial revenue growth from the Canadian consumer market and global medical markets by the end of 2019.

But more of the company's revenue still came from sales to the medical market - Aurora generated $25.9 million in revenue from sales to the Canadian and worldwide medical cannabis markets, and $21.6 million from from domestic adult-use sales.

Other institutional investors have also recently bought and sold shares of the company.

"Delivering strong quarters is getting to be a habit at Aurora", he said.

It said the company's Edmonton facility will soon reach full production capacity and a recent harvest completed at the facility exceeded targeted yields. "We are going to have to see a better retail infrastructure in provinces across the country in order to see the level of sales that I think everybody is anticipating, but it's going to take some a couple of more quarters". However, with the launch of Canadian consumer market, Aurora reported sales of CAD 21.6 Million. The average price for a gram of legal dried cannabis across Canada was $9.70, almost 50 per cent more than the black market price of $6.51 per gram, according to the most recent data from Statistics Canada. The company also expects to increase production of cannabis from 120,000 kilograms to 150,000 kilograms at its Aurora Sky facility. The company said in a statement that "Non-cash expenses including the December 31, 2018 mark-to-market adjustments of approximately $190 million primarily on the company's derivative investments contributed significantly to a net loss of $240 million".

"Aurora disagrees with this practice, and we're not collecting tax from our medical patients but rather are absorbing the cost despite the slight negative effects on our revenues", said Battley. The institutional investor purchased 47,487 shares of the company's stock, valued at approximately $236,000.

Aurora Cannabis stock opened at $7.59 on Monday. Tilray expected to release its fourth-quarter results on Tuesday, while Canopy Growth Corp. will issue third-quarter results on Thursday.

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