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Home / Business / Aurora cannabis profits show strong pot sales growth but a disturbing earnings trend

Aurora cannabis profits show strong pot sales growth but a disturbing earnings trend



Aurora Cannabis Inc. has nearly quadrupled its sales and achieved a strong market share in a profit report on Monday, describing the first quarter of sales of legal recovery pots in Canada, as well as large losses and a shrinking margin.

Aurora

ACB, -5.53%

ACB, -4.52%

reported a loss of C $ 237.8 million on net proceeds of C 54.2 million $ after a $ 7.7 million gain on sales of $ 1

1.7 million a year ago. Large losses were expected as a result of a decline in marijuana shares in the final quarter as Aurora has invested heavily in other companies in the industry and needs to track their performance as part of the bottom line. Aurora said that these adjustments amounted to about 190 million CAD of its losses.

The results reflect the launch of legal marijuana sales in Canada, the first industrialized nation to offer recreational potential sales nationwide. Aurora claimed a large market share for Canada in the launch quarter, with sales of $ 21.6 million from its home country.

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"Based on the available data that Health Canada released for the second quarter of 2019, Aurora accounted for approximately 20% of total consumer sales," Aurora said in its announcement.

Aurora announced in January sales of $ 50-55 million after deducting excise duties. Not enough analysts cover the company for a reasonable consensus estimate. The Aurora share recovered in late trading but posted a slight increase of less than 2% after publication.

The falling margin of Aurora may be more worrying than the quarterly loss impacted by the stock. Aurora said the gross margin on cannabis sales dropped from 70% in the previous quarter to 54% in the same quarter last year, to 63%. However, Aurora maintained its goal of showing adjusted earnings in the fourth quarter of the fiscal year, saying the margin change should be temporary.

"The decrease [in gross margin] was mainly due to a lower average selling price per gram of dried cannabis, the impact of excise taxes on net sales of medicinal cannabis and a temporary lower share of cannabis oil sales in the company's sales mix. The gross margin also impacted the increased packaging requirements under the Cannabis Act, as well as one-off start-up and optimization costs, as our Sky facility was brought to full production, "said Aurora in her announcement, referring to a plant for marijuana cultivation. "The Company expects the launch of new derivative product lines, once approved under Health Canada guidelines, to help improve margins."

Marijuana Stocks Should Be Considered: Aurora Cannabis Investments May Be More Valuable Than Their Pot

Earlier, the Aurora profits were increased by far-reaching investment in other marijuana companies, but a decline in the top Inventories at the end of last year should weigh on the company's bottom line in this report. This has not stopped Aurora from continuing to invest, including the acquisition of medical marijuana sales in Mexico and the investment in High Tide Inc. late last year and the announcement of the purchase of one of the last independent members of the so-called "blessed eight" in January ,

The company announced Monday morning that it had shipped its first cannabis oil to the United Kingdom. Aurora previously said that it sends marijuana to more than 20 countries.

The shares were significantly lower on Monday before the release of Aurora. Canopy Growth Corp.

CGC, -5.56%

WEED, -5.06%

share fell 5.6%, Cronos Group Inc.

CRON, -0.56%

CRON, -0.65%

shares fell 0.6% and Tilray Inc.

TLRY, -4.82%

shares fell 4.8%. The ETFMG Alternative Harvest ETF

MJ, -2.33%

which tracks a basket of top stocks, declined by 2.3% and the Horizons Marijuana Life Sciences Index ETF

HMMJ, -2.95%

fell 3%.


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