Aurora Cannabis (TSX: ACB) (NYSE: ACB) reported its fourth quarter financial results for the period ended June 30, 2020 this evening, reporting fourth quarter revenues of $72.1 million, a 5% decline from the prior quarter, along with a net loss of $1.9 billion for the quarter. Looking at the full fiscal year, the company reported net revenues of $278.9 million, along with a net loss of $3.31 billion, or a loss of an astounding $33.94 per share.
While full financials have yet to be published by Aurora, select information has been provided ahead of the firms fourth quarter conference call. With revenues coming in at $72.1 million for the quarter, the breakdown is said to consist of $35.3 million in consumer cannabis net revenue and $32.2 million in medical cannabis net revenues.
Revenues from consumer cannabis fell 9% on a quarter over quarter basis, while total volume sold increased by 36%, a function of becoming a value brand within the space. Total cannabis produced meanwhile increased to 44,406 kilograms from 36,207 kilograms in the prior period.
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The company highlights that the cash cost to produce each gram has fallen to $0.89 per gram from $1.22 in the prior period as well, however this is all for naught considering the company managed to sell only 16,748 kilograms of cannabis during the quarter, or roughly 37.7% of what was produced – meaning the company continues to waste precious dollars on producing product it simply cannot sell due to demand factors.
Gross margin during the quarter meanwhile was -$79.96 million, a function of the company having to write off millions of dollars worth of “cost of sales” inventory during the quarter to the tune of $105.5 million. This was before the company recorded SG&A expenses during the quarter of $60.1 million, and R&D expenses of $7.6 million, indicating that the company still has no semblance of profitability.
Further “balance sheet adjustments” as the company refers to impairments include a fixed asset impairment charge of $86.5 million, a $29.6 million impairment to the fair value of inventory, and a non-cash impairment of $1.6 billion to goodwill and intangible assets.
Looking towards the cash position of Aurora, the company managed to burn through $149.9 million over the course of the quarter, while simultaneously raising $81.9 million. The end result, is a cash position of $162.2 million as of June 30, while also identifying that the company may be in trouble if the taps to further cash are turned off.
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The rest of the balance sheet is not much rosier, with accounts receivable falling from $80.3 million to $54.1 million over the quarter. Inventory meanwhile tumbled from $251.2 million to $121.8 million, while biological assets climbed from $30.6 million to $35.4 million. Total current assets overall fell from $654.2 million to $420.7 million, while total assets were obliterated, tanking from $4.72 billion to $2.78 billion over the three month period thanks to numerous impairments.
Things look slightly better on the other side of the balance sheet, with accounts payable falling from $128.6 million to $95.6 million. Loans and borrowings however climbed from $21.8 million to $120.5 million. Total current liabilities climbed from $206.4 million to $272.8 million. The bright side for the company here is that total liabilities overall fell from $819.4 million to $657.2 million during the quarter.
Lastly, Aurora Cannabis provided guidance for its first quarter FY2021 results, with net revenues expected to come in between $60 and $64 million, with revenue expected to be only from that of cannabis net revenue. This represents a further quarterly decline in revenues, while gross margins are expected to be between 46% and 50%, and SG&A costs are expected to be in “the low $40 million range.”
The company continues to forecast that it will be adjusted EBITDA positive in the second quarter of 2021.
Aurora Cannabis last traded at $6.59 on the NYSE in after hours trading.
Information for this briefing was found via Sedar and Aurora Cannabis. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
