Aurora Cannabis announces financial results for the fourth quarter and fiscal year 2019

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"In 2019 Aurora became a world leader in cannabis production, research, innovation and international market development. We are carrying out all our strategic priorities," he said. Terry Booth, CEO. "Our best cultivation methods allow us to grow consistent and high-quality cannabis on a scale. For this reason, we have achieved solid revenue growth in the fourth quarter. We are working to extend our reach on US markets. Our partnership with UFC is a base for exploring CBD-based cannabis and hemp food, we are also exploring further opportunities and leveraging our strategic consultant We are focused on building a sustainable, high-margin business by providing patients and to consumers access to safe and reliable medicine ".

Glen Ibbott, CFO, added: "We continue to see strong growth in cannabis revenues in both medical and consumer categories. Our cultivation execution continues to reduce production costs and improve gross margins. The diversified portfolio of Aurora products both patients and consumers remain in demand.With the Canadian launch of derivative products in the coming months, we have made the necessary investments to ensure promptness and concentration on a variety of value-added products. a consumer market expanded with premium cannabis and new product forms ".

Highlights of the fourth quarter of 2019

(Unless otherwise indicated, comparisons are made between Fiscal Q4 2019 and Q3 2019 results and are in Canadian dollars)

  • The net revenue of cannabis increased 61% in sequence to $ 94.6 million
    • Canadian consumer cannabis revenues up 52% ​​a $ 44.9 million
    • Medical cannabis revenue up 10% a $ 29.7 million
    • Revenues wholesale of $ 20.1 million
  • The cash cost for production per gram sold has decreased by 20% in sequence to $ 1.14 per gram in the 4th quarter of 2019.
  • The production volume increased by 86% in sequence to 29,034 kg.
  • The net margin on cannabis net revenue increased from 3% to 58% in sequence.
  • Aurora's medical patient base grew 10% to 84,729 sequentially. At the date of this release, Aurora has approximately 89,700 registered active patients, with a further 6% increase.
  • Correct EBITDA loss of $ 11.7 million represents a 68% improvement over $ 36.6 million in the third quarter of 2019.

Subsequent events

  • Closed a modified and enlarged $ 360 million guaranteed credit line which includes an accordion function that allows Aurora to upgrade the structure by approximately $ 40 million,
  • He sold the remaining 28,833,334 shares of The Green Organic Dutchman Holdings Ltd ("TGOD"), at the price of $ 3.00 per share for the total gross income of $ 86.5 million, which represents an approximate internal rate of return of 50% for the Company.

Highlights of the 2019 business year

  • Net income of $ 247.9 million, up 349% compared to the previous year.
  • Gross margin on net cannabis revenues of 55% in the 2019 fiscal year compared to 65% in the 2018 fiscal year.
  • Products kilograms and kilograms sold of 57.442 kg and 36.628 kg, respectively 920% and 629% compared to 2018.

Main financial and operational metrics for the fourth quarter of 2019

($ thousands, except for operating results)

Q4 2019 (6)

3rd quarter 2019

$ Edit

% Modify

Financial results





Net income (1)

$ 98.942

$ 65,145

$ 33,797

52%

Net revenue from cannabis (2) (3a)

$ 94.640

$ 58.652

$ 35.988

61%

Net revenue from medical cannabis (2) (3a)

$ 29.651

$ 27.001

$ 2,650

10%

Net revenue from consumer cannabis (2) (3a)

$ 44.882

$ 29.577

$ 15.305

52%

Net revenue wholesale of bulk cannabis (2) (3a)

$ 20,107

$ 2.074

$ 18.033

869%

Gross margin before PV adjustments on cannabis net revenues (2) (3b)

58%

55%

N / A

3%

Gross margin before PV adjustments on net revenues of medical cannabis (2) (3b)

60%

60%

N / A

0%

Gross margin before PV adjustments on net cannabis consumption revenue (2) (3b)

55%

50%

N / A

5%

Gross margin before FV adjustments on wholesale income of cannabis (2) (3b)

61%

60%

N / A

1%

Selling, general and administrative expenses

$ 72.869

$ 67,104

$ 5,765

9%

Adjusted EBITDA (4)

($ 11,737)

($ 36.572 thousand)

$ 24,835

68%






Balance sheet





Working capital

$ 227.802

$ 469.729

($ 241 thousand nine hundred twenty-seven)

(52)%

Cannabis inventory and biological resources (5)

$ 144.275

$ 118.023

$ 26,252

22%

Total assets

$ 5,502,830

$ 5,549,780

($ 46.95 thousand)

(1)%






Operational results – Cannabis





Cash cost for production per gram sold (2) (3c)

$ 1.14

$ 1.42

($ 0.28)

(20)%

Active registered patients

84729

77136

7593

10%

Average net selling price of medical cannabis (2)

$ 8.51

$ 8.51

$ 0.00

0%

Average net selling price of consumer cannabis (2)

$ 5.14

$ 5.48

($ 0.34)

(6)%

Average net selling price of bulk cannabis wholesale (2)

$ 3.61

$ 3.52

$ 0.09

3%

Kilograms produced

29,034

15,590

13,444

86%

Kilograms sold

17793

9160

8633

94%

(1)

Net revenues represent our total cannabis-based product gross revenues starting October 17, 2018.

(2)

These terms are defined in the "Cautionary declaration relating to certain performance measures"section of this MD&A

(3)

Refer to the following sections for the reconciliation of non-GAAP measures with the equivalent IFRS measure:


a.

Refer to "Income"section for the reconciliation of cannabis net revenues with the IFRS equivalent.


b.

Refer to "Gross margin"section for reconciliation with the IFRS equivalent.


c.

Refer to "Cash cost of dry cannabis sales and cash cost for dry cannabis production sold – Aurora Produced Cannabis"
section for reconciliation with the IFRS equivalent.

(4)

Adjusted EBITDA is calculated as net profit (loss) net of interest income (expenses), growth, income taxes, depreciation, amortization,
changes in the fair value of inventories sold, changes in the fair value of biological assets, compensation based on shares, exchange rates, changes
fair value of financial instruments, profits and losses on presumed sale and loss of non-monetary value of equity investments, goodwill and other
resources.

(5)

Represents the total biological resources and the cannabis inventory, excluding products, accessories, supplies and consumables.

(6)

During the three months ended June 30, 2019, the Company recorded minor adjustments at the end of the year to: (i) capitalize certain wages,
share-based clearing and indebtedness costs related to the construction of our production facilities that have been spent incorrectly
previous periods; and (ii) reverse the items that had been accumulated in excess in previous periods. The net impact of these adjustments compared to the fourth quarter of 2019 has been adjusted
EBITDA was a reduction of $ 14.9 million in declared operating expenses





($ thousands)

Three months are over


The year is over

30 June 2019


March 31, 2019


30 June 2019


30 June 2018


30 June 2017

Net revenue from medical cannabis










Dried cannabis in Canada

14,438


14,501


58101


24,231


14,679

Dried cannabis in the EU

4,481


4,004


14,141


9835


439

Canadian cannabis extracts (1)

10,732


8,496


34447


8690


804

Total net revenue from medical cannabis

29,651


27,001


106689


42756


15,922











Net revenue from consumer cannabis










Dry Cannabis

41,813


27461


88603



Cannabis extracts (1)

3,069


2,116


7,992



Total net revenue of consumption cannabis

44,882


29,577


96595













Net revenue in bulk of cannabis dried bulk

20,107


2,074


22,181













Total net cannabis revenue

94640


58652


225465


42756


15,922

(1) Revenue from cannabis extracts includes cannabis oils, capsules, capsules, sprays and current receipts.





($ thousands)

Three months are over


The year is over

30 June 2019


March 31, 2019


30 June 2019


30 June 2018


30 June 2017

Net income

98942


65145


247939


55196


18,067

Design, engineering and construction services


(914)


(2403)


(4218)


Patient counseling services

(606)


(809)


(4214)


(3933)


(2145)

Analytical testing services

(317)


(1238)


(2976)



Other revenues from the cannabis segment










(accessories, hemp, other)

(2760)


(962)


(10,370)


(1865)


Business revenue integrated horizontally

(619)


(2570)


(2511)


(2424)


Net revenue from cannabis

94640


58652


225465


42756


15,922

Consolidated net revenues increased by 52% a $ 98.9 million in Q4 2019 compared to $ 65.1 million in the previous quarter. The revenues of consumer cannabis have been $ 44.9 million in the fourth quarter of 2019, with an increase of 52% compared to the previous quarter and a 45% contribution to total consolidated net revenues. Canadian net medical cannabis revenues increased to $ 25.2 million in the fourth quarter of 2019, up 9% compared to the previous quarter. Revenue growth was mainly driven by additional production capacity and the offer available for sale from Aurora Sky e Aurora River (Bradford).

The average net selling price of cannabis has decreased by $ 1.08 per gram in the previous quarter from $ 6.40 in the third quarter of 2019 a $ 5.32 in the fourth quarter of 2019. This reduction is mainly attributable to the increase in sales volumes to wholesale and wholesale markets that produce lower average net sales prices than medical markets.

The gross margin on cannabis net revenues increased to 58% in the 4th quarter of 2019, compared to 55% in the previous quarter. The improvement in the gross margin was driven by the continuous decrease in the cash cost for production per gram and by the higher gross margins obtained on wholesale sales.

In the fourth quarter of 2019, Aurora produced 29,034 kilograms of cannabis compared to 15,590 kilograms in the previous quarter. The increase in 86.2% of production is mainly due to the additional production capacity added by Aurora Sky, River (Bradford), is Ridge (Markham) structures. The extraction capacity increased from 20,400 kilograms to 26,400 kilograms in the 4th quarter of 2019. After the end of the quarter, Aurora's annual extraction capacity increased further to 45,600 kilograms.

SG&A in the 4th quarter of 2019 increased by 9% a $ 72.9 million, compared to the previous quarter. The change was mainly driven by an increase in fulfillment and shipping costs related to the growth of consumer cannabis sales and the continuous investments in sales initiatives, distribution network and partnerships to conduct research, develop products and promote awareness of the brand name. Aurora will continue to invest in the infrastructure and talent needed to increase market share in the global medical and consumer cannabis markets, but will remain strongly focused on doing it as efficiently as possible.

In the fourth quarter of 2019, the adjusted EBITDA loss improved by 68% a $ 11.7 million from $ 36.6 million in the previous quarter. The development of a profitable and solid global cannabis company is extremely important to Aurora. In the 2019 fiscal year Aurora focused on excellence in execution and the Company's KPIs show its success in this regard. In addition, Aurora has tackled previously identified production bottlenecks and continues to see a strong sell-through of company retail products. However, the Canadian consumption channel continues to present challenges at retail level in key markets and the resolution of this problem is beyond the control of the company. Aurora is working closely with all our regulatory and channel partners to simplify distribution while the Company continues to follow positive adjusted EBITDA on a consolidated basis.

The current annual production capacity of the annual operating structure of the operating structures exceeds 150,000 kg per year, based on the planted premises. As an industry leader in ad hoc cultivation, Aurora focuses on the constant production of high quality, low cost products to meet the changing market demand. Aurora is well positioned to respond quickly to market conditions with shorter delivery times, higher collection cycles and higher plant yields.

perspective

The global cannabis and hemp markets represent a significant opportunity for Aurora and the Company will continue to make the necessary investments today to build long-term shareholder value. However, Aurora will take a balanced approach to these investments with a focus on managing a sustainable and profitable business.

The introduction of new product formats in the Canadian consumer market in the autumn represents a significant opportunity for the company. Aurora expects to have a solid range of products ready for launch in December. Given the very first phase of development of the consumer market in Canada and in international medical markets, management expects sales volumes and revenues from one quarter to the other to be volatile. The Company expects Adjusted EBITDA to continue to improve in the future due to expected revenue growth, improvements in gross margin and the prudent growth of SG&A.

The passage of the US Farm Act presents new opportunities in the largest cannabis and cannabis-based CBD market globally, and as such Aurora is committed to establishing a substantial operational footprint in the United States. US market, the Company is considering its stakeholders and how the various state and federal regulations will affect its business prospects. Numerous alternatives are being evaluated to increase Aurora's presence in the US market and the Company is committed to engaging only in activities permitted by state and federal laws. Management believes that there are currently legal market opportunities both at the state and federal levels that can add operating cash flows and be fundamental pillars of Aurora's strategy and long-term success.

Telephone conference

Aurora will host a teleconference tomorrow, 12 September 2019, to discuss these results. Terry Booth, Managing Director, Glen Ibbott, Financial Administrator, Cam Battley, Chief Corporate Officer e Michael Singer, Executive Chairman, will host the call starting at 9:00 am Eastern time. A question and answer session will follow the presentation of the management.

Date:

Thursday 12 Septemberth, 2019

Time:

9:00 am Eastern time | 7:00 Mountain Time

Webcast:

https://bit.ly/34gYCj5

Replay:

(416) 849-0833 or (855) 859-2056


until 12:00 Eastern time, Thursday 19 September 2019

Reference number:

6084057

About Aurora

Based in Edmonton, Alberta, Canada with a financed capacity of over 625,000 kg per year and sales and operations in 25 countries on five continents, Aurora is one of the largest and most important cannabis companies in the world. Aurora is vertically integrated and horizontally diversified in each key segment of the value chain, from structural engineering and design to cannabis breeding and genetic research, cannabis and hemp production, derivatives, product development to high added value, domestic cultivation, wholesale and retail distribution.

Highly differentiated from its peers, Aurora has established an extraordinarily advanced, coherent and efficient production strategy, based on purpose built structures that integrate cutting-edge technologies in all processes, defined by an extensive automation and customization, with resulting in large-scale production of constant quality product. Designed to be replicable and scalable globally, our production facilities are designed to produce cannabis on a significant scale, with high quality, industry-leading yields and low production costs per gram. Each of Aurora's facilities is built to meet the standards of good manufacturing practices of the European Union ("EU GMP"). The certification was granted to the first Aurora production plant in Mountain View County, the MedReleaf Markham plant, and to its European wholly owned cannabis distributor Aurora Deutschland. All Aurora facilities are designed and built according to the GMP standard of the EU.

In addition to the rapid organic growth of the company and the strong execution of strategic mergers and acquisitions, which today includes 17 100% subsidiaries: MedReleaf, CanvasRX, Peloton Pharmaceutical, Aurora Deutschland, H2 Biopharma, BC Northern Lights, Larssen Greenhouses, CanniMed Therapeutics , Anandia, HotHouse Consulting, MED Colombia, Agropro, Borela, ICC Labs, Whistler, Chemi Pharmaceutical and Hempco – Aurora stands out for its reputation as a partner and employer of choice in the global cannabis sector, having invested and established strategic partnerships with a range of leading innovators, including: Radient Technologies Inc. (TSXV: RTI), Cann Group Ltd. (ASX: CAN), Micron Waste Technologies Inc. (CSE: MWM), Choom Holdings Inc. (CSE: CHOO), CTT Pharmaceuticals (OTCC: CTTH), Alcanna Inc. (TSX: CLIQ), High Tide Inc. (CSE: HITI), EnWave Corporation (TSXV: ENW), Capcium Inc. (private), Evio Beauty Group (private) and Wagner Dimas (private).

Aurora ordinary shares are traded on TSX and NYSE under the symbol "ACB" and is a component of the S & P / TSX composite index.

For more information on Aurora, visit the investor's website. investor.auroramj.com

Terry Booth, CEO

Aurora Cannabis Inc.

Forward-looking statements and non-IFRS sector measures

This press release refers to some non-IFRS measures, including some industry metrics. These metrics and measures are not measures recognized under IFRS and have no prescribed meanings under IFRS and, therefore, are unlikely to be comparable to similar measures presented by other companies. These measures are provided as complementary information to the IFRS measures providing a further understanding of our operating results from the management point of view. Therefore, these measures must not be considered in isolation or in place of the review of our financial information reported under IFRS. This press release uses non-IFRS measures, including "net cannabis revenue", "adjusted EBITDA", "organic goods and cannabis inventory", "cash cost for production per gram sold", "price of average net sales per gram "," production capacity "AND" SG&A ". The foregoing are operational measures commonly used in the industry, but can be calculated differently than other companies in the industry. These non-IFRS measures, including sector measures, are used to provide investors with additional measures of our operating performance that may not otherwise be evident when they are based exclusively on IFRS parameters. The definitions of non-IFRS measures are reported in our financial statements, MD&A and in this press release.

This press release also includes statements containing certain "forward-looking information" pursuant to the applicable securities law ("forward-looking statements"). Forward-looking statements are often characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "can", "will", " potential "," proposed "and other similar words, or statements that certain events or conditions" may "or" occur "and include, but are not limited to, the execution of definitive agreements and the closing of the transaction. These statements are only predictions. Various hypotheses have been used in drawing conclusions or making projections contained in the forward-looking statements during this press release. Forward-looking statements are based on management's opinions and estimates as of the date on which the statements were made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected forward good-looking statements. These risks include, among other things, the ability to retain key personnel, the ability to continue to invest in infrastructure to support growth, the ability to obtain financing on acceptable terms, the continuous quality of our products, the experience and customer loyalty, the development of third-party sales channels for governmental and non-governmental use for adults, estimate of consumer demand management in Italy Canada and in the jurisdictions in which the Company exports, the expectations of future results and expenses, the availability of additional capital to complete the construction projects and the improvement of the structures, the risk of a successful integration of the acquired activities and operations, the capacity of expand and maintain distribution capacities, the impact of competition and the possibility of changes to laws, rules and regulations in the sector. The Company has no obligation and expressly disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, except as expressly required by applicable law.

NTSX, NYSE nor their applicable regulatory service providers (as defined in the Toronto Stock Exchange and New York Stock Exchange policy) assume responsibility for the adequacy or accuracy of this release.

SOURCE Aurora Cannabis Inc.

For further information: For media: Heather MacGregor, +1.416.509.5416, heather.macgregor@auroramj.com; For investors: Rob Kelly, +1.647.331.7228, rob.kelly@auroramj.com

Related links

https://auroramj.com/

. (tagsToTranslate) Aurora Cannabis Inc. (t) Healthcare and hospitals (t) Medical pharmaceuticals (t) Pharmaceutical products (t) Cannabis (t) Banking and financial services (t) Earnings

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