Sep 22, 2022
Earlier this week, Aurora Cannabis Inc. (Nasdaq: ACB) (TSX: ACB) reported fourth quarter financial results and traded lower on earnings.
After the Canadian Licensed Producer reported earnings, the stock was removed from the S&P/TSX Composite Index (according to the latest quarterly review by S&P Dow Jones Indices). The index serves as the primary gauge for Toronto Stock Exchange-listed companies, and we find the removal to be significant.
Although the removal from the S&P/TSX Composite Index is not a positive development, it should not come as a surprise. Earlier this year, Canopy Growth Corporation (Nasdaq: CGC) (TSX: WEED) was removed from the S&P/TSX 60 Index. We believe Canopy Growth is a better business than Aurora Cannabis so the removal does not shock us.
The last few years have been challenging for Aurora Cannabis and the management team is executing on a strategy to make the business profitable. We believe the company needs to execute on several important growth initiatives to accomplish its goals and will monitor how the story evolves from here.
Although we are favorable on the company’s stronger balance sheet, there is a lot of work that needs to be done to make the business profitable. Today, we issued an update on Aurora Cannabis and have highlighted 3 important takeaways from the earnings report.
During the quarter, Aurora Cannabis generated $50.2 million of total cannabis revenue. This amount is slightly lower than what was reported in the prior quarter and we find that to be significant. Since the prior quarter excluded a $1 million provision related to anticipated returns on US CBD extract sales, the company technically generated more revenue than the prior quarter.
As of June 30th, the Canadian cannabis company reported to have $488.8 million of cash, (includes $51 million of restricted cash) and no secured debt. During the fourth quarter, Aurora Cannabis strengthened its balance sheet by reducing the amount of debt by $155.3 million. The management team reaffirmed its annual cost savings expectation and we want our readers to be aware of this.
During the fourth quarter, Aurora Cannabis reported a more than $615 million net loss. When compared to the same period last year, the company’s net loss increased significantly. The management team attributed the higher net loss to non-cash impairment charges.
https://technical420.com/cannabis-article/3-key-takeaways-from-aurora-cannabis-earnings-report/#
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